Daniel Education

2021-08-10 18:47:13 CURRENCIES

There are many currencies that can be traded in Forex.

Everyone can start with major currencies which are mostly traded and represent some of the world’s biggest economies.

USD
GBP
EUR
CAD
AUD
JPY
NZD

7 currencies stated above are the main currencies. Open / Comment

2021-08-10 18:39:17 Next on the ladder are the hedge funds, corporations, retail market makers, and retail ECNs.

Since these institutions do not have tight credit relationships with the participants of the interbank market, they have to do their transactions via commercial banks.

This means that their rates are slightly higher and more expensive than those who are part of the interbank market.

At the very bottom of the ladder are the retail traders.

It used to be very hard for us little people to engage in the forex market but thanks to the advent of the internet, electronic trading, and retail brokers, the difficult barriers to entry in forex trading have all been taken down.

This gave us the chance to play with those high up the ladder and poke them with a very long and cheap stick.

Now that you know the forex market hierarchy, let’s go next ! Open / Comment

2021-08-10 18:25:13 FOREX MARKET HIERARCHY

At the very top of the forex market ladder is the interbank market. Composed of the largest banks in the world, the participants of this market trade directly with each other (“bilaterally”) or through voice or electronic brokers (such as EBS Market and Reuters Matching).

The competition between the two companies, EBS and the Reuters (now rebranded as Refinitiv), is similar to Coke and Pepsi.

They are in a constant battle for clients and continually try to one-up each other for market share. While both companies offer most currency pairs, some currency pairs are more liquid on one than the other.

For the EBS platform, EUR/USD, USD/JPY, EUR/JPY, EUR/CHF, and USD/CHF are more liquid

Meanwhile, for the Reuters platform, GBP/USD, EUR/GBP, USD/CAD, AUD/USD, and NZD/USD are more liquid.

All the banks that are part of the interbank market can see the rates that each other is offering, but this doesn’t necessarily mean that anyone can make deals at those prices. Open / Comment

2021-08-10 18:24:02 Let's continue our lesson Open / Comment

2021-08-04 19:39:36 I will continue our lesson here once reach 8,000 votes Open / Comment