If you go through forex discussion forums you might come across people using the term interbank to include any person who is occupied in forex trading including sellers and buyers. You migh also come across this term on a forex brokers website like
Dukascopy. Naturally you might think that interbank currency trading is another term used for retail currency trading which is not true. Let’s see how interbank currency trading differs from retail forex trading.
In the beginning there were only banks and large financial institutions in forex market. These major financial institutions were exchanging different international currencies between each other as part of trading. This was done through dealing desk from which each would be in touch with the other banks around the globe. These banks would quote each other the rates at which they would be prepared to trade one currency for another currency and would strike the deal as soon they agree on the prices. These trades were happening between major financial institutions like insurance firms, mutual fund companies and mainly between banks. Hence these currency exchanges were called interbank currency trading.
Today the forex market is not entirely controlled by Banks though they are still the major players in the market. Speculative trading became possible in forex market during the 1970’s when exchange rates of most of the key currencies were almost fixed. During those days the trading was done by telephone almost exclusively. The major financial institutions like banks started utilizing the service of full time currency traders to raise their profits by speculating on the rise and fall of
forex currency rates. During the late 1990s internet started gaining high popularity and today internet is the main medium of trading. These days just about anyone who got a personal computer can become a forex trader since almost all the developed and developing countries provide a high speed internet connection. But, a retail trader like you and me do not have the capability to set up our own dealing desk and communicate directly with the banks or currency traders around the world. This where forex brokers come in, since we need an intermediary to get involved in trading with others.
How Forex Brokers WorkForex brokers let the small retail traders like us to open accounts with them as clients and then negotiate with the
interbank forex trading market on our behalf. These brokers normally have an agreement with one of the banks to use their dealing desk to get involved in forex market. This gives the forex brokers the capability to accept smaller fund balances and hence many will let you open
mini forex accounts. However this can result higher costs like a higher spread or you may come across bucket shops forex brokers who will manipulate the prices make sure that they are getting some profits on top of the bank’s spread involved. Large brokers who are directly part of the forex market usually have their own dealing desk. However these brokers are less likely to offer mini forex accounts and you mostly will be trading standard lots, which means you should have hefty sum in your account.Now that you know about interbank currency trading why not take some action and make real money. You can either go with a manual trading system like
10 minute forex wealth builder or get an automated forex software like
FAP turbo to make money with currency trading.
Importance of Forex TrainingAugust 13th, 2009 by Forex Trader -->
Forex is a goldmine. People hear about huge potential of forex trading and jump straight into trading without even learning the essentials. If you would like to make money with foreign exchange, you will surely need good training in forex trading. It is true that currency trading is perhaps one of the most lucrative money making opportunity for small individual investor. Forex market attracts more and more people because of its relatively low margins, particular patterns and trends with which you can identify winning trades and of course the enticing opportunity of making loads of money. On the other hand, foreign exchange trading involves big risks and without proper forex training you wouldn’t know how to protect your investment and avoid massive losses.Of course there are managed forex accounts and automated forex robots available in the market. However you must realize that they are not substitution for good forex training and it is absolutely essential that you get good understanding of the market and the risks involved in forex trading.
In order to make some serious cash with forex trading you must do the trading by yourself. A forex trading robot like
FAP Turbo or
Ivybot can make you money but nothing compared to what experienced traders are making by doing the trades themselves. To do the trading yourself you need solid forex training which goes much deeper than the basics. You will most likely lose money if you do not get good forex education.
Hence it is important that you take your time to learn
technical analysis especially learn how to read charts and identify winning trades.
On internet, there are numerous websites and expert forex traders offering forex training online. These offers include free informational websites, forums and ebooks to paid ebooks, forex training videos, membership websites that offer personal mentoring and expensive coaching programs and seminars.
Who Offers the Best Forex Training?
A successful forex trader need not be a great teacher and not all great teachers are good at practicing what they teach. However if you are going for the expensive seminars or coaching programs make sure that the mentor got first hand experience in forex trading. If you are absolute newbie at forex trading, you may want to start out with a free site and free forex ebooks. Once you have learned the basics and ready for actual trading buy a good foe guide with simple yet effective trading system. If you have decided to join a mentoring program, then verify that the mentor is well qualified to conduct forex training. Join for a forex mentor program like
Pip Mavens which offers monthly payment option. That way at anytime you feel that your forex mentor is unable to help you out of difficult situation, you could leave the forex training program without losing your money. However the mistake that most beginners commit is the lack of patience. Most of the respected traders became successful after years of trading experience.If you join a forex a training membership site which provides step by step forex training then follow it whole heartedly. Do not lose you patience and skip any steps. Practice what you have learned on a demo account.
What to expect from a good Forex Training program?A good forex trading training will teach you how the
forex market works, what are the risks involved, how to perform technical analysis, how to identify winning trades and how to perform actual trading. Knowing when to enter in a trade and when to close one is really important. The currency trading education should help you to understand the importance of your trading decisions, both when entering and when exiting the market.
Technical analysis is one of the most important parts of any forex training and you can expect it to cover interpreting charts and indicators to identify trends and price movements in the foreign exchange markets. Make sure that you spend enough time and practice yourself to get a thorough understanding about forex technical analysis. Fore education programs will also tech you about fundamental analysis and might advice you to watch out for
forex news and
signals which should help you to stay away from trading if the market is highly volatile.
You can become a highly successful trader if you have a desire to learn and attain the necessary skills of forex trading. It needs patience, dedication and persistence. Forex trading is not a get rich quick scheme. If you are dedicated to learn forex and apply these qualities to your forex training it will be life changing experience for you.
Pip MavensAugust 5th, 2009 by Forex Trader -->
The Pip Mavens Inner Circle is a complete forex training membership site. Inside Pip Mavens inner circle expert trader Chris reveals his secret trade journal where he is sharing his daily trading details, price movement interpretations, and explanation of the exact strategy he is using at that very moment to enter into profitable trades. You might have already come across various forex education membership sites online where the members will be provided forex trading guides and custom indicators etc. So what makes this Pip Mavens inner cirlce better (or worse) in comparison with other online forex training sites? In this Pip Mavens review we will examine these factors in detail.Pip Mavens is not available for general public now. However you can get into the inner circle by invitation.
