Brokerage and Currency Types
Sixth session of Forex Training
Welcome back to Forex professional training in financial markets.
In this session Brokerage and currency types will be explained and we will introduce banks, brokers, trading volume in Forex, floating and fixed-rate currencies.
Banks, Financial Institution and pioneer Brokers
Firstly, Banks. They can, by obtaining relevant licenses and credits, offer a number of services to their clients. For their good clients and all other brokers they render their selling and buying supports.
Banks amplitude and diversity is low but they have a strong ability to offer different deals to their customers.
A Broker is a bank or an institute which offers services in financial markets.
A foreign broker, such as Forex provides all different types of financial services at once, as do others, such as, CITI Bank and Deutsche Bank. These banks sit amongst the top five banks in the world.
Secondly, private Brokerage, which offers services in financial markets. There are local brokers, that are in fact foreign exchangers or banks who offer only foreign exchange currency services.
There are also stockbrokers who deal mainly, if not exclusively, with the stock market. There are also foreign brokers, such as Forex.com who offers all types of financial services at once including the Stock market.
Now we will talk about transaction volume in financial markets, especially Forex. This market is an interbank network in which 1.7 billon dollars have been transacted per day since 2008.
An increase in people’s understanding of finance and the ever-increasing growth of technology have created financial opportunity for some to gain profit off these markets.
Now with the predominance of the Internet, Chinese banks and new comer traders, market daily trades have risen to nearly 3.2 billion dollars in 2013. That is an increase in daily trading of 1.5 billion dollars in 5 years.
Now, to determine the market value, there are several points that should be considered.
Firstly, market price is always floating freely. This is based on supply and demand between buyers and sellers in the market.
And secondly, there is no limit on price increase or decrease.
Determining market price in international markets is not up to a single organization, but it is based on the supply and demand between banks and financial institutions.
It is comparable to housing prices, where no single organization is involved in adjusting the price.
To reiterate, price is always changing due to the presence of buyers and sellers in the market.
Organizations and institutions with their policies can only direct the market trend. Market value is influenced by taxes, national and international financial news.
Types of foreign currencies
Foreign currencies are divided into two groups: floating and fixed-rate currencies.
Floating currencies are those whose price is based on supply and demand, such as USD, GBP and JPY.
Fixed-rate currencies are those whose price is calculated by governments and central banks.
Only floating currencies are available to trade with on Forex Market.
That concludes this session, until next time and another session take care.