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Main » 2011 » September » 2 » "Highlights of pricing in the market FOREX"
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"Highlights of pricing in the market FOREX"

    Highlights of pricing in the market FOREXIn a full understanding of the rules of the "game" in the FOREX market and is largely the basis for success. The most sensitive issue in this case is the understanding and classification of action or a quoted bank dealer dealing center in order to determine whether an outright "catch" and "slow" or is it a real market prices and normal reaction. Knowing all the nuances of largely avoiding unsubstantiated claims and actually reduce some of the standard errors.

    Consider the specific situation:
    On the information terminal went critical data - certainly an interesting time to enter the market, most traders and immediately begins to ask quotation. What if this happens very often (we are talking about a situation when I got really significant news) - the trader receives a quotation from an extended delay or spread and perceives this as a blatant and offensive trickery.

    Let us now look at the situation on the other hand - the dealer bank starts at the same time to enter the foreign counterparty (the situation with 100% food and not the withdrawal of orders for foreign markets will not consider - usually such offices do not last long) and what he sees - in the most famous gourmet brokers for some time (usually no more than 30 seconds) at the terminal hangs OFF PRICE. Throughout the world, is considered incorrect to follow the price in the first seconds after the news, but if you insist - you technically represent a spread of 50 points. On the other hand, based on our six years of experience in this market, I can say that very many of those who had still "jump" in the market for news, waiting for deep disappointment - usually always behind this is a serious movement, direction is very often not the same as the initial reaction, and sometimes "counterintuitive" that the small Russian deposits and reckless regard to an acceptable risk of 90% led to a loss of money. Of course, for people who gave the world such an interesting game as a "Russian roulette" chance 1 / 10, even very good, however, everyone decides everything for itself, we hardly have the right of someone to teach.

    Another case - quiet market, the trader asks for non-stop price and get the real market (in these moments really real market generally corresponds to the indicative or REUTERS DOW JONES, so that the dual interpretation can not be), but does not make any deals. What action does the dealer bank - if it starts at the client with the same frequency to go to foreign contractors and do nothing, you can put a bourgeois CHOICE, ie to give a quotation without spread (say, the guy got - you determine what you still want to), it would seem remarkable - Dolby Bourgeois, get choice and be happy - but of choice for the unwritten ethics of the dealer can not refuse, refuse once - you will receive the title " Russian sheep "with all its consequences, in general, about the good deals have to forget. Of course, choice is not given often - usually just slides apart spread, as a signal that the number of requests for a fixed market has exceeded all the correct rules.

    From the foregoing, there is a fairly simple question - as an ordinary trader can see the real market and indeed what it actually is.

    Let's start with what he sees every trader in the window of their information systems (Reuters, Dow, DBC, etc.) - this is indicative, that is, prices do not mean unconditional pledge from a bank to buy / sell at the stated levels. Among the financial institutions that they throw back their quotes, there are banks and businesses of all sizes - from reputable market makers to Russian, and other SNGeshnyh Malawi, Nauru, handsome. Again - one administered prices "hands", others use various "machines". "Handles" and as "machines" have a tendency to fail, and to move prices in the direction desired for a particular speculator (somewhere near may be large and sweet stopak client, which can be performed to disrupt 7.5 pips - as there not to go). Equally important is how many contractors have one system or another - for example, to supply information about Reuters 2.600 banks in the Dow - 1000, DBC - 500. We put all three systems in a number of months and watched the match in their prices realities. Night on the franc DBC could die for 20 minutes and, in comparison with Reuters, prices differed by 70 points (enough for a quiet market), with the DOW strange things happen in moments of strong motion - an impression that the DOW - an independent brokerage office and at certain moments gives "slightly" outdated market, then after a while graphics were built in strict accordance with reyterovskimi, suggesting that they knew where the market is in these moments. However, I will not falsely accuse DOW - have a lot of advantages over other systems, at least in terms of intelligence and novostiynogo flow in FOREX, but the lag in prices (and not only on quotes forex, but the indices, etc.) does place.

    Since still see a real market?
    In the world there are systems that combine only the largest banks, for example, ELECTRONIC BROKER SYSTEM (EBS), DEALING2000 / 2 (D2). If the bank is in these systems exhibits a price, then it means his unconditional commitment to make a deal on it. These systems serve as a kind of electronic brokers. A number of large banks are machines, translating the prices of these systems. And here's the catch as possible, since the machine is not a man. For example, if the market for CHF was a second ago, 52-55, and then 52 and the next bid HIT 15 (old bid, say 20 minutes, delivered back), the stupid machine will average between 15 and 55, razdvinet spread of 5 pips on each of direction and give you the information window of 30-40. In this market is really in the area of ​​50-53. At night, for CHF such glitches can last half an hour - hour and at the same screen will be constantly updated, because other banks are similar to slot machines.

    In the case of the EUR, JPY and GBP the situation described above is rare, so we need to closely monitor the quotes, put up respectable banks. Serious attention should be paid to BANK ONE (USA), BARCLAYS (GB), RZB (AUSTRIA), ALLIED (IRISH), DEMIR (TURKISH), SOCIETE GENERALE (FRENCH), ANZ (AUSTRALIA) (unfortunately, this is of little help in determining the real market for CHF in force as described above).

    Do not forget about the currency futures (spot market quotes can be calculated using the forward premium / discount, the data on them are also in the information systems). Using this, you completely decide for themselves the problem of the real market for EUR and GBP.

    We would like to stay in CHF. The fact is that if the spread is recalculated, which exists in futures on the currency spot market in spreads, we get 12 points, respectively, it adds uncertainty in equity quotes you received (in fact, usually gives a standard spread of 5 pips.) For these reasons, when determining the level of the market for that currency in the first place you should pay attention to the currency of the European group - EUR and to a lesser extent, GBP, and do not respond to relatively large and sharp changes in CHF, EUR, if standing still. Many traders prefer to play once again in CHF due to the fact that the spread of 5 pips there corresponds to about 3 pips on other currencies, but if you take into account all the above, this advantage is not so obvious. Perhaps it is worth sacrificing them in order to feel more relaxed and no doubt once again in the untidiness of your broker?

    So, summing up. To determine the real market watch for the following sources of prices:

  • EUR - SOCIETE GENERALE, ALLIED, BANK ONE, FUTURES
  • GBP - BARCLAYS, BANK ONE, FUTURES
  • JPY - SOCIETE GENERALE, RZB, ANZ
  • CHF - FUTURES or CROSS RATE EUR with

    And if you're fairly active trader (do a few transactions a day), we recommend the following times for operations:


  • EUR, GBP, CHF - from 10:00 to 22:00
  • JPY - c 15:00 to 22:00 and from 03:00 to 08:00
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