Читать книгу Available about Forex trading in Russia - Oleg Papkov - Страница 5

Those who trade in Forex are not alarmed by the difference in prices between the best Ask buy price and the best Bid sell price. It happens the other way around. The absence of a spread, the so-called zero spread, is alarming. Because it becomes unclear who forms this zero spread. The presence of a spread, the difference between the best buy price and the sell price – is a natural process rather than an artificial one.

And yet, many call the spread the broker’s earnings. Yes. If not from the commission, then from the spread, the broker earns on us on each of our transactions. I think that the spread exists and it is constantly changing, it is not wise to blame brokers. Let’s try to disassemble this mechanism and see what’s inside :).

Let’s go to the market and go to the stalls where they sell apples. Behind the counter, sellers – in front of the counter, buyers. And if it’s a wholesale market, it’s even more interesting.

It is clear that sellers want to sell more expensive, and buyers want to buy cheaper. So much for the price difference. So much for the spread. And all are standing. Posted their prices. Nobody buys anything.

This state can be called a little differently: everyone posted their pending orders.

But now there is a buyer who urgently needs to buy some apples on the market, namely all that the seller has, but at any nearest cheap price, i.e. 75 kg at 101 rubles. No more expensive.

I bought. The market situation has changed. The seller left satisfied with 75 kilograms for 101 rubles.

The price went up and the cheap seller left.

The best selling price has changed and increased. Now it is 101 rubles per kilogram.

That is, the activity of a market buyer who wants to urgently buy a product, buy, as they say in Forex from the market, provoked an increase in prices and a change in the spread.

Now let’s assess the situation in which the seller urgently appeared ready to sell all his goods at any nearest price that the buyer will offer.

Availability of a seller from the market

We are looking at how the market situation will change after this action.

From the market seller, prices dropped

The spread increased and the best price to buy Ask decreased and became 97 rubles.

Indication of the spread in MT4.

Here is how the price index is displayed with the help of the price glass in other platforms.

The depth of market in MetaTrader 5.

And in another platform.

It is clear, according to a slightly simplified mechanism, how the movement, the change in the exchange rate of the currency instrument occurs. How Bid, Ask and Spread prices are formed.

But let’s go back to the brokers and their demo account.

Broker – an intermediary that provides a meeting of buyers and sellers in the market. To be able to perform operations on the Forex market, you need to choose a broker that meets the necessary criteria and open a trading account with him.

Demo account – a training account with virtual money, where a novice trader can train, make transactions without the risk of losing capital.