The full understanding of the rules of the "play"
on the FOREX market in many ways and is the basis for success. The
most sensitive issue in this case is the understanding and
classification of action a quoted a dealer bank or dealing center in
order to determine whether outright "catch" and "inhibition" or is
it a real market prices and normal reaction.
Knowing all the nuances largely avoids 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, and most traders 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 Quotes are delayed or advanced spread and perceives
this as a blatant and offensive sell.
Let us now look at the situation on the other hand - the dealer bank
starts at the same time to go to foreign contractors (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 6
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 attitude to the risk tolerance of 90% of the cases led to
the loss of money. Of course, for people who gave the world such an
interesting game as a "Russian roulette" chance of 1 / 10 pretty
good, though, everyone decides everything for itself, we hardly have
the right of someone to teach.
Another case - quiet market, the trader incessantly asking price and
get the real market (in these moments really real market usually
corresponds to the indicative REUTERS or DOW JONES, so that the dual
interpretation can not be), but does not make any deals. What action
does the dealer bank - if it is under this customer begins with the
same frequency to go to foreign contractors and do nothing, the
bourgeois can put CHOICE, ie give a quote without spread (say, got
boyfriend - do you determine what you still want to), it would seem
remarkable - Dolby Bourgeois, get choice and be happy - but from the
choice of unwritten ethics dealer can not refuse, refuse once - you
will receive the title " Russian sheep "with all its consequences,
in general, about the good prices will 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 sorts of valid norms.
From the foregoing, there is a fairly simple question - as an
ordinary trader can really see the real market and that it actually
is.
To begin with, that he sees every trader in the window of their
information systems (Reuters, Dow, DBC, etc.) - is indicative, ie,
prices do not mean unconditional obligation of a bank to buy / sell
at the stated level. Among the financial institutions that 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 "handles", while
others use different kinds of "machines". "Handles" as "machines"
tend fail, and prices move in the direction desired for a particular
speculator (somewhere there might be big and sweet client stopak on
the performance of which can derail 7.5 pips - as there not to go).
Equally important is the fact how many contractors have one system
or another - for example, Reuters delivers information about 2.600
banks in the Dow - 1000, DBC - 500. We put all three systems in a
series and a few months watching the prices matched their realities.
Night on the franc DBC could die for 20 minutes and, in comparison
with Reuters, prices differed by 70 points (for a sufficiently quiet
market), with the DOW strange things happen in moments of strong
motion - an impression that the DOW - an independent brokerage firm
and definite moments gives "a little" out of date the 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 indiscriminately blame DOW - his
weight 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.) actually has
place.
As yet to see a real market?
In the world there are systems that integrate only the largest
banks, for example, ELECTRONIC BROKER SYSTEM (EBS), DEALING2000 / 2
(D2). If the bank within these systems puts a price, then it means
his unconditional commitment to make it a bargain. 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 automaton is not a man. For example, if
the market for CHF was 1 second ago, 52-55, and then 52 HIT, and the
next bid 15 (old bid, say 20 minutes, delivered back), then the
stupid machine will average between 15 and 55, razdvinet spread of 5
pips on each direction and give you the info window 30-40. The real
market is still in the area of 50-53. During the night of CHF such
glitches can last for half an hour - hour and at the same screen
will be constantly updated, because other banks are like machines.
In the case of EUR, JPY and GBP the situation described above is
rare, so we need to closely monitor the quotes, put up reputable
banks. Serious attention should be paid to BANK ONE (USA), BARCLAYS
(GB), RZB (AUSTRIA), ALLIED (IRISH), DEMIR (TURKISH), SOCIETE
GENERALE (FRENCH), ANZ (AUSTRALIA) (unfortunately, it is of little
help in determining the real market for CHF by as described above).
Nor should we forget about the futures exchange (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 at the CHF. The fact is that if the recount
spread that exists in futures on the currency spot market in
spreads, we will get 12 points, respectively, it adds uncertainty in
assessing the validity of quotes you received (after all, is
generally given 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 the
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 it 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 even if you have enough active trader
(do a few transactions a day), then 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