Forex exchange rate risks on

The forex trading is primarily a carrier of the risk. By assessing the quality of a potential risk should be the following types of him, the foreign exchange risk, interest rate risk and credit risk, risk countries. Exchange rate risk. Exchange rate risk to the ongoing transition to the world market, the supply and demand on a remarkable balance of positions. For the time, it is open, the situation will be any changes in prices. The most popular measures to reduce losses short and roll positions profitable than the losses should be included in the boundaries are the boundaries and the loss limit. By limiting to a maximum of a particular currency to an operator is entitled to a single time during the negotiations. The loss of the border is a measure to prevent not by the operator through stop-loss levels setting. Interest rate risk. Interest rate risk refers to the profit and loss account, by the volatility of spreads, as well as the amount of insufficiency and the maturity of the distances between the forex trading in the book. This risk is relevant to the currency swaps, from the start, futures and options (see below). To minimize interest rate risk, the limits on the total size of inadequacy. A common approach is the separation of the discrepancy, because of their maturity in up to six months and six months. All transactions are recorded in the computerized systems used to calculate the positions of all appointments for the delivery, gains and losses. A continuous analysis of the interest rate environment is necessary, any changes that impact on May, the remaining gaps. The credit risk. Credit risk refers to the possibility of an outstanding position in foreign currencies May not be returned, as agreed, because it is a voluntary or a part of. In these cases, the trading on the regulated market, as the center of Chicago. The following types of credit risks are well known: 1. Replacement of risks occurs when the business of the bank can not find their books are in danger of not receiving repayment of the bank, if necessary, is unbalanced. 2. The risk for a regulation occurs because the time of the areas on the different continents. Therefore, the currencies of May in the trade at different prices at different times of the trading day. Australia and New Zealand dollars, then the Japanese yen, followed by the European currencies and ending with the U.S. dollar. Consequently, the payment of May, a party who declares bankruptcy (or are in bankruptcy), immediately thereafter, but before executing its own payments. Therefore, in assessing credit risks, the user need not only the market value of their currency portfolio, but also the potential exposure portfolios. The potential risk of May, by analyzing the probability in the period until the end of the leader. The currently available IT systems are very useful in implementing the policy of credit. The credit lines are easily controlled. Moreover, the adequacy of the systems in foreign currency since April 1993 by the operators of credit policy implementation. The operator of full coverage of the credit line for a return. At the meeting of the negotiations of the credit line will be automatically adjusted. When the line is full, which prevents the operator finished with the return. After the expiration of the funds back to its original level. The dictatorship of the risk. Dictatorship (sovereign) of the risk of interference by the government in the Forex activity. Although theoretically in all exchange-rate policy as well as currencies are in all respects with the exception of the risk countries, because the most important markets in terms of currencies in the U.S.. Therefore, dealers that kind of danger and his condition to regulatory restrictions.

Short-data on the origin and evolution of the exchange rate

A medium of exchange has a long history, and you can return to the ancient Middle East and from the Middle Ages, when the trade began to form after the commercial bank develops Exchange, the third party payments, the flexibility and growth in foreign currency transactions. The foreign exchange market is characterized by modern times of high volatility (that is a frequency and amplitude of change in the price) and a relative stability, even within the century. The mid-1930s, the British capital London is the first, the center of currencies and the British pound was the currency for trade and to maintain as a reserve currency. As in ancient times to the exchange rate was telex or cable, the pound sterling usually the nickname "cable". After the Second World War, where the British economy was destroyed and the U.S. was the only country free from war, U.S. dollar, in line with the Bretton Woods Agreement between the United States, Britain and France (1944), the reserve for the capitalist countries and all currencies are the U.S. dollar (through the formation of rows of currencies maintained by the central banks of countries affected by interventions or the purchase of foreign exchange). From the perspective of the U.S. dollar was on the gold at $ 35 per ounce. So is the U.S. dollar was the reserve currency of the world. Under this agreement, the International Monetary Fund (IMF) today announced financial support for developing and former socialist countries, the processing industry. To these goals the IMF uses instruments such as the reserve in the trenches, making it a member in its own stock rates at the time of payment with credit and superstructure drawings stand-by agreements. The letters are the norm in the form of loans from the IMF, in contrast to those of the compensatory financing facility will aid the financial support by the time problems caused by the reduction in export earnings, the stock financing facility which aims to improve the storage of raw materials to for the maintenance of price stability in a specific product and the expansion of facilities for the members to the financial problems in the quantity or for a period longer than the other plants. At the end of his 70-years, the float of currencies was officially mandated, this is the most important milestone in the history of financial markets in the XX century, education in forex trading in the context of understanding. This is the motto of May to be negotiated around the world and their value depends on the current supply and demand in the market, and there is none for the maintenance, that must be met. Exchange rates dramatically increased volume of foreign exchange was freely against each other. While sales in the year 1977 was a day of U.S. $ 5 billion, rose from U.S. $ 600 billion in 1987 to U.S. $ 1 billion mark in September 1992 and stabilized at 1.5 billion until 2000. Most important factors affecting growth in this band are described below. An important task was the greatest volatility in currencies, increasingly, the reciprocal influence of different economies, the bank's records, by the central banks, especially the exchange rates of currencies, the intense competition in product and in the same time the merger of companies from different countries, the technological revolution in the field of the common currency. The last lecture in the development of systems for automatic processing and the transition to a common currency for trading via the Internet. In addition to the treatment systems, while all operators in the world electronic duplication of work with the broker on the market. The development of technology, software, telecommunications, and the players have experience of sophistication, their ability to manage foreign exchange gains and risks. Therefore, the trade in the world wisdom volume increase.

Forex - What is it?

The international market for foreign exchange Forex is a special kind of global financial markets. The goal of the Forex traders to take advantage of the buying and selling foreign currencies. The exchange rates for currencies in the market for the development of sales are constantly under the offer and the request for amendment. This is firmly under the influence of crucial importance for the human society event in the field of economy, politics and nature. Therefore, the current prices of the currencies evaluated for instance in the U.S. dollar fluctuates in relation to the upper and lower meanings. The use of these fluctuations as a function of a principle of "buy cheaper - sell high" to get the dealer profits. Forex is different in comparison to all other areas of the global financial system due to its high sensitivity to a large and changing number of factors, accessibility to all traders and corporate exclusively high trade turnover, creates a freezing of liquidity and foreign exchange trading tower - the clock of working with the professional management in the normal or during the holidays in their country finding markets abroad open. As in any other market the trading on the Forex, with a large potential of profitability for the major risks - with a. It is possible, a success that a certain training including a familiarization with the structure and nature of the Forex, the principles for the pricing of currencies, the factors affecting prices alterations and levels of risks, the source of the information provided on all these factors, the techniques of analysis and forecast of development of the market and the tools for teaching and the rules. An important role in the process of preparing the negotiations on the part of the demo forex trading (ie trading with a demo account with some virtual currency), which as a witness for all knowledge and to minimize the necessary experience in the trade is not in a material loss should be replaced.