Forex Talking

Foreign exchange brokers, unlike the stock brokers do not take positions for themselves, they only service banks. Their functions to bring together buyers and sellers in the market, optimize the price they show to their customers and quickly, accurately and in good faith execution of trade orders.

Most currency brokers carry out business via phone using an open window in front of the microphone broker system that continuously transmits everything that he or she speaks of direct telephone lines for the speaker boxes at banks. Thus, all banks can hear all transactions are carried out .. Due to the open window systems used by brokers, a trader has an opportunity to hear all prices quoted whether the bid was injured or proposal has been accepted, and after prices. As a trader will not be able to hear this amount,
Special requests and proposals and the names of banks with prices. Prices are anonymous.

Anonymity banks, commerce market provides market efficiency, since all banks have equal opportunities for trade. Sometimes brokers charge a commission, which should be paid equally between the buyer and seller. Charges are discussed on an individual basis, banking and brokerage firms. Brokers show their clients prices made by other customers either two-way (prices and suggestions) or prices in one direction (or bid proposals) price on his or her clients. Traders show different prices because they "read" the market differently, they have different expectations and different interests. Brokers who has
more than one price for one or both sides will automatically optimize the price.


In other words, the broker will always show high prices and low offer. Thus, the market has access to the optimum possible dissemination. Fundamental and technical analyses used to predict the future direction of currencies. Trader may test the market, by pushing a small amount bet on that, if there is any reaction. Another advantage of brokers market is that brokers can provide a wide choice of banks for their clients. Some European and Asian banks overnight desks so their orders are usually along with brokers who can deal with American banks, adding liquidity to the market.

Direct solutions

Direct trading decisions based on reciprocity. Market-making or bank quoting price - Bank expects that calls for reciprocity in regard to the price called. Direct dealing with trade provides more discretion, as compared to transactions with brokers market. Sometimes traders took advantage of this feature.

Direct decision is used to be conducted mainly by telephone. Phone decision was fraught with errors and slow. Dealing errors that are difficult to prove and even more difficult to resolve. Direct decision was forever changed in the mid-1980s, through the introduction of systems solutions.
The system of online computers that are linked to banks around the world for one-on-one basis. Execution solutions systems characterized by speed, reliability and security.

Decision systems constantly being improved, so as to give maximum support to the dealer principal functions: trading. Software sufficiently reliable in picking up a big figure in exchange rates and standard value date. In addition, extremely accurate and fast in establishing contacts with other parties, switching between conversations and access to the database. Trader is in visual contact with the information exchanged on the monitor. It is easier to see than to hear this information, especially when
switching between the chains.

Most banks use a combination brokers and direct dealing systems. Both approaches achieve the same banks, but not the same parties as well as corporations, for example, can not cope brokers in the market. Traders develop personal relationships with both brokers and traders in markets, but choose their trading average price based on quality, not on personal feelings. Market share between systems and brokers involved varies based on market conditions. Fast market conditions are favorable for the solution systems,
while the regular market conditions are more favorable for brokers.


Compliance with the system

Unlike systems solutions, for which trade is not anonymous and implemented
for one-on-one matching basis of anonymous traders and individual case against the rest of the market, similar transactions with brokers market. However, unlike the brokers market, there are no individuals to bring prices in the market and liquidity may be limited at times. Compliance with the system are well suited to trade smaller amounts, as well.

Present systems characteristics of speed, reliability and security and matching systems. In addition, credit lines, automatically controlled systems.

Traders input common credit line for each counterparty. When the credit line was reached, the system automatically forbids dealing with a specific party by
display of credit restrictions or trader shows only the price made by banks, which are open lines of credit. Once the credit line is restored, the system allows the bank to decide anew. On the interbank market, traders deal directly with the consideration of systems, systems compliance, and brokers in additional fashion.

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