Forex - Not Herbalife?

    The other day in the subway I saw a wonderful advertisement of the following content - “Earnings from $ 100 a day. Full and part-time employment is possible. Not Herbalife. Not FOREX. " He laughed a long and sincerely.
    Everything on Forex! Indirect calls for this can be found on posters in the subway, and in journal articles. Forex in Ukraine, it seems, has already been mythologized: few people understand that this, in fact, is such, but almost everyone is sure that this business is terribly profitable. In the view of ordinary people on Forex, you can quickly and easily get rich. Popular beliefs about the speed of possible enrichment on the world currency platform are quite fair, but about easy money - they are deeply mistaken. Playing with the currency is much easier to go broke than make money. The vast majority of Forex traders lose money, only a few manage to trade successfully.
    What is it? So, FOREX (from the English FOReign EXchange market, you can often find Russian spelling - “Forex”) is the international currency market, and they trade money there. You can buy, say, Swiss francs for the euro, pay with the British pounds for the yen, and so on. Moreover, all operations take place exclusively in non-cash form. Such non-cash trading, by the way, is called dealing.


    The global interbank foreign exchange market FOREX acquired its current form in the mid-70s, after the termination of the Bretton Woods system of regulation of exchange rates in 1971 and the transition to “floating rates”. Since that time, FOREX has become the most dynamic and liquid market in the world.
    Unlike the futures or stock markets, trading on FOREX is possible around the clock during the working week. The rapid movement of funds, low cost of transactions, high liquidity makes FOREX one of the most attractive markets for investors. To date, the daily turnover of the FOREX market is from 1.5 to 3 trillion dollars. This is more than 5 times the total daily turnover of all stock markets in the world.
    Another significant difference between the FOREX market and all the others: it does not have any specific trading location. In fact, FOREX is a huge network of currency dealers interconnected through telecommunications, which are dispersed throughout the world financial centers and operate as a single mechanism around the clock. Currency trading is carried out by telephone or through computer terminals. Transactions are made simultaneously in hundreds of banks all over the world.

    To obtain information on the state of financial markets in real time, as well as financial and economic news, FOREX market participants use the international information systems Reuters, Dow Jones, Bloomberg, Tenfore and others. The main currencies on the FOREX market are the US dollar, euro (before the introduction of the euro - the German mark), Japanese yen, Swiss franc and British pound sterling. It is believed that they fully meet the requirements that apply to freely convertible currencies.
    It looks interesting in general, agree! But, let's immediately notice that the main sources of knowledge of the vast majority of the population about stock trading are magazine articles, the book by Theodore Dreiser “The Financier” and several Hollywood films with an unchanged happy ending. The plots of these stories are not very diverse. A good, but unfairly offended by fate, poor American guy (or lady), cleverly tapping the keys of a personal computer, buys several shares for the last money. Then, having made several simple manipulations with them, he makes a lot of money, which is enough to sit in a chaise lounge by the end of his life near his own pool and occasionally recall difficult times. Some people understand that these stories are composed by people very far from the stock market. But there are many who naively believe that,
    According to statistics, only one out of ten traders in the long term trade Forex with profit. Moreover, this income, as a rule, is far from fantastic. Typically, the annual profit of the trader does not exceed 30-40%. Few manage to increase the initial deposit by 50-60%. That is, you should not really count on income above 5% per month. With large deposits, of course, substantial amounts are obtained, but with small accounts, even a profit of 100% per annum will look insignificant. With less than ten thousand dollars, you will only lose time and earn nothing but a headache from constantly sitting at the computer. However, most traders in Ukraine work just with small trading accounts. Now the average bill size is 1-2 thousand dollars.
    In many ways, the success of working on Forex is determined by the choice of a broker. You can not do without it, only a bank or a dealing company will provide you access to the market and provide the opportunity to work with a special computer program (trading terminal), without which it is simply impossible to trade on Forex. The answer to the question of who is best to deal with depends entirely on your well-being. When concluding an agreement with a broker, it is necessary to open a trading account; its minimum size varies significantly between banks and dealing companies. For dealing companies, the threshold for entry is quite democratic - an average of $ 100, now there is a rate of even $ 10. Banks, however, raise the bar much higher, the most running amount is $ 2,000, and some bring the minimum deposit to $ 10,000. Thus, bankers cut off a small client,
    When choosing a broker, a fiscal question is also important. At the bank, income tax when you close your account will be withheld automatically. Dealing companies are not tax agents, so you can decide whether or not to indicate the income from trading in your tax return. But, having opened a deposit at the bank, you can not guess if you will see your money again. If the bank is included in the deposit insurance system, you will receive your funds even if your broker goes bankrupt. No one will give such guarantees to customers of any domestic dealing center. The fact is that in Ukrainian legislation there is no mention of the Forex market, therefore, there is no spelling out how the structures providing access to it should work.

    According to the current legal acts, only organizations having a special license of the National Bank of Ukraine can conduct currency transactions. It is actually issued only to banks. Therefore, most dealing centers act only as firms that provide information services. And contracts with clients are concluded on behalf of an affiliate foreign broker, which is usually not in the Ukrainian jurisdiction, and is usually registered in the offshore zone. In which case, it will be impossible to get a refund. In addition, you will not even have the right to demand them, because due to restrictions of domestic currency legislation, a guarantee deposit will have to be transferred abroad on a fictitious basis, for example, as payment for any goods or services.
    Recently, the so-called betting scheme for concluding contracts has begun to spread among Ukrainian dealing centers. You sign an agreement directly with a Ukrainian company, but the subject of the agreement is not the currency transactions themselves, but the rates on the growth or decrease of a particular currency in relation to another currency. You will trade on Forex, but by agreement it will look like a game on a sweepstake in a bookmaker. Such a scheme is quite legal. However, there is an extremely unpleasant moment for the client in it: transactions that fall under the definition of “betting” are not subject to judicial protection. So, having concluded a bookmaker agreement, you should not count on Themis help. But compared to the offshore scheme, the bookmaker is still considered more reliable. The broker is located in Ukraine, and you can try to at least somehow influence it.
    If we omit the question of risks, the service and banks and dealing companies provide approximately the same and, as a rule, they do not charge for it. The main thing is to maintain a minimum balance of your account. Brokers are not setting any commissions for their clients now, access to the trading terminal is also free. However, if you decide to trade in the broker's computer room, you will have to fork out for a job, the traditional monthly rate is $ 50. For this money, you can even sit at a computer without any risk, no one will drive you out. You can conduct transactions by phone, the operator will follow the instructions, but this method is more like a lottery, you will place bets blindly, without seeing or analyzing the market situation.
    Those who are accustomed to relying not only on luck will have to study the behavior of the foreign exchange market. For people who have never encountered stock trading and are not familiar with technical analysis, it will be extremely difficult to figure it out on their own. However, now almost all dealing centers conduct training courses. Forex wisdom is usually taught in 1-2 months, on average it takes 200-300 dollars. The obtained theoretical knowledge can be immediately tested in practice, and without prejudice to your budget. Almost all brokers now provide the opportunity to work on a training trading terminal. Except that you will risk virtual money, training trading is no different from the real one, transactions are carried out in real time with current quotes and technical analysis data.
    However, to be seduced by the results of training trading is not worth it. On educational accounts, about 60% of traders act successfully, and when they start working with real money, only 10% receive a profit. The fact is that there are psychological difficulties in switching from a training account to a real one. With virtual money, people work more relaxed, they have no fear of losing real money. The point here is exclusively in psychology. This is the same as playing paintball and participating in a real shootout.
    To work on Forex did not look like a game of roulette, experts strongly advise entering the market, armed not only with intuition, but also with a proven trading system. If you do not trade on a hunch, then you should work according to a clearly formalized plan. It should be clear to you under what combinations of certain market factors it is worth buying, at what to sell, and when it is better not to conduct transactions at all. It is necessary to form a set of signals on the basis of which you will make decisions, and then you will not have to suffer each time in search of an answer to the question of what to do.
    The signal for action can be both news (political, economic, social) that can influence the market, as well as technical analysis data. Hundreds of various graphical indicators have already been accumulated, indicating how and when a currency can behave. Experts do not recommend trading based on only one indicator, but you should not overdo it with their number either.
    The world currency market is called Interbank Market, and all leading banks and governments are the actors there. Operations are very active. There is also a third participant. These are thousands, to put it mildly, of “not very smart people,” some of whom live in our country. For let's not compare the trader in London's Barclay's, having access to all key information, using professional trading terminals that allow you to see the entire depth of the market and served by a team of analysts, and Vasya Pupkin, who suddenly decided that he would soon become George Soros with his hard-earned five hundred dollars . When asked what he is doing, Vasya proudly answers: “I am a currency trader. Well, the international currency market, I work there, understand? ”However, Vasya can not worry. In any foreign exchange market its dollars do not come. They safely settle in companies that provide him with Forex services. But more about that below.
    In the West, Forex fraud appeared somewhere in the 70s of the last century. The scheme was essentially the same as it is now on the Internet. Small offices lured gullible “customers”, painted them wonders of earnings in the foreign exchange market, where everyone with a small capital can get a 1: 100 margin and buy “how much” of any currency, and then sell it more expensively and earnestly. They will briefly explain what’s what, signed a piece of paper stating that I’m familiar with risks - and go. “Clients” were in the halls where there were displays with quotes and charts, and “trading” was carried out by filling out paper orders and submitting them to the cashier’s window. “Experts” constantly scurried about in the audience (from the former losers who were kept by crooks), they talked with respectable views on the topics of trading strategies, thereby fueling interest among suckers.
    Naturally, the “customers” thought they had participated in the international market. Nowhere did they participate. Money did not go beyond the office; they were lost and got to the company. The “experts” sighed reproachfully. They said: “Well, yes, right, because it takes time to learn this. And your capital is not enough. What will you do with a thousand dollars? Now, if more - then yes. You’ll definitely start earning. ” Naturally, the “experts” had their interest. They answered questions about personal success very vaguely or lied without blushing. Go check it out!
    Soon invented, “oh miracle!”, Trust capital management. There was generally beauty. Unscrew the sucker so that brought, say, 20 thousand dollars and gave to the management of the "experts." A month later, show him the left paper, compiled on the basis of already known past charts. From the papers it followed that the score doubled. The jubilant “client”, who introduced himself as the future owner of various real estate and expensive cars, carries more money. They borrowed from friends, there were cases - they laid houses. For some time, the sucker was fed with rainbow fake reports, and then something happened on the market, and the “client” was told: “Something extraordinary happened. Your money, no, didn’t burn out, they “hung”. Don’t worry, you just need to bring more money urgently. The main thing is to stay in the game and everything will get better. You saw how fast money is made. ” And the suckers carried clinging to last hope. For a while, they were again shown fabricated reports that things were getting better, and then it all started in a new way.
    “Finishing” the “client” was also very important. The sucker should not have the strength left to go around the courts, and money for expensive lawyers, he had to want only one thing - to forget this nightmare. The law of this business stated: “A real“ client ”divorce does not begin when he brought in the first money (even a lot), but when he lost them.” The first long-awaited loss opened up vast opportunities for further divorces. He lost a little - “Well, now you understand what's what, it's time to work for real.” Lost a lot - “Carry more, as much as possible. You’ll play everything back. ” I lost everything - “Also not a problem. Become an “expert." Look for “customers.” You will have a percentage. ” Ukrainian "forex" of our days, does this not remind you of anything ?!
    As soon as they developed in the West, such offices went to Asia - Singapore, Pakistan, India, the Philippines. In the West, people are literate, they knew firsthand what the stock market, bonds, licensing of brokerage. Mostly immigrants were caught there. In Asia, people have less money, but it’s easier to work - the people are more naive, the legislation is "duller", it is easier to pay off if something happens. The path of such offices was reminiscent of the history of famous casinos. Many lives were broken, many families were sent around the world and destroyed. Psychological trauma is difficult to overestimate. All the “clients”, often not stupid and educated people, were in shock when they found out how brazenly and simply deprived of hard-earned money. The moral damage from this is much worse than ordinary robbery.
    Many went to court. But forex experts with smiles brought all the same documents signed by “clients”: “I want to trade, I am familiar with risk, I have experience (experience is what“ experts ”taught)”. Sometimes “clients” judged something, but not much. Forex experts have never been discouraged. For the inevitable communication with threatening, crying and imploring "customers" morally prepared in advance. However, the offices knew the measure. Bring them a million dollars for the client, they would hardly have taken it. About a million and in law-abiding America, gloomy guys could come and politely ask to pay, and even with interest. And a person who has that kind of money probably understands finances or finds someone to consult with. Not. The bet was on average amounts per person in the middle class. Maximum tens of thousands of dollars. The risk was minimal. In the extreme (or not extreme, and in a pre-planned) case, you could evaporate with money and open a new office in another place, city, or even country. Forex workers were imprisoned few, rarely, and briefly. We went out and did the same. Profitable business, easy money.
    Years have passed since then. What has changed in forex? In fact, nothing. The general scheme has remained the same. The main thing has changed. The Internet and electronic trading have appeared. Having greatly advanced the stock market and other traditional financial markets through remote access, the Internet has brought a lot of benefit to currency fraudsters. Even the elderly “bison” of this business quickly made friends with the computer. “Talented” youth came. Forex brokers have opened up new horizons. The coverage of the Lochovsky audience has increased. Money flowed electronically faster. And it became more pleasant to communicate with “clients” through remote access. There was no need to see their anger, supplications and snot. However, do not think that the business has become easier. On the contrary. It’s necessary to organize everything technically, to contain a horde of good and reliable (so as not to chat too much) programmers, able to manipulate quotes, charts and spreads at the right time. There was also a need to establish professional marketing, personal electronic communication with suckers. Competition, again, everyone needs free money. But the income is worth it.
    Fedor Petrenko
    Oligarch

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