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Who are the market makers?

Market-mejkeremi Forex (market-maker, mm.) are both large banks and financial companies that define the current quotations (course). Percentage of market-maker in the General market level is significant, that often defines price movement. Market-maker on Forex must constantly monitor the buying and selling of currencies and join them in the transaction. In other words, mm. is a party (player, trader), which committed itself to provide constant liquidity on a particular instrument (s) by placing orders to buy or sell during the trading session.

Market makers and market-users

According to the activity and the impact on exchange rates Forex participants can be divided into 2 groups: market-makers (video) and market-users (market-users, users).

As mm. Are brokers or dealing centers that assume the risks associated with the acquisition and possession on their own accounts, securities, or other assets for the Organization and sales. MM. operate on the Forex (in other markets) as directly the trade deals.

Let's say Forex broker has an agreement with the stock exchange (i.e. major broker) commit to hold for a specified period application exhibited simultaneously with some difference between the Bid and Ask price, i.e. purchasing and selling prices. The mm. receives certain benefits, such as reduced Commission on transactions. Thus, mm. -free stock market player who was in a special situation.

Market-users are also financial institutions that carry out the query value of a currency pair. As a rule, etc are small banks and finkompanii, which use the rate fixed for the Forex market maker. Market-users-not the most active market players. Although the volume of their transactions on the stock exchange can be quite large, each share is insignificant.

MM. define market quotations for the market-users, and can accept or reject these quotations. I.e. mm. quoted price (like "make" it, make price), and the market-users it take (take price).

The trader and the final quote

Quotes in the trading terminal of the trader are the final rate of the currency pair when the initial quotation (the course) was based on the market-another user (broker or dealer) in a large Bank (market-maker). Therefore, quotes different brokers may differ, as mm. they too are different. Dilinogovyj Center (the broker) has the legal right to make the changes, favorable quotes him (but not a trader). It is ok. That is why before opening an account with a broker (DTS) correctly will be familiar with the trading conditions of the broker.

By the way, compare quotes by proven Forex brokers (Forex4you, Alpari and InstaForex) and you will be surprised.

How the Forex market makers?

MM. do the following operations on the Exchange:

1. perform the orders your broker and only in certain cases-trade for their own account.
2. act as intermediaries, receiving profit on the difference between the buying and selling rates (spread).
3. buy and sell currency.

I.e., mm. to show the price of their purchases and sales. In fact, the execution price orders. becomes public. The most favourable prices for buying and selling will be moved automatically to the beginning (top) of the queue and the computer will execute the first.

Each market has its own market-makers. A broker may be one or more mm., whose quotes broker can offer its customers. Of the world's large mm. include Barclays Bank, Deutsche Bank, PBS, Mizuho Bank, Chase Manhattan Bank, Citi Bank, Union Bank of Switzerland.

Features of formation of prices

Some Forex brokers can slightly move the price, acting in its own interests. It's legal, though not quite fair to traders, clients of the broker. And while these changes are small, just a couple of points, you can imagine how much profit you can get, if traders are large lots ranging from 10 and up.

The second point, which sometimes happens at the Exchange during the release of important news trader sees on his trading terminal, that there is no link or quote when requesting price. Thus, the broker shall insure themselves against sudden movements so that the trader does not come at a price, not the broker. In this case it is better to wait to reduce market volatility, then quietly open position. Some traders until the news put pending orders.

Forex market maker is desired and popular player on the market. Knowing the features of his work, the trader increases understanding of the market and, therefore, can increase their profits.


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