четверг, 30 мая 2013 г.

Lesson 12. Continuation about the stock market

By the beginning of this chapter you receive an overview of the stock market, and know that conduct securities transactions can be through a broker. But where do you start? First you need to choose the right broker. Currently on the site there is a list of FFMS brokers who operate in the stock market.
When choosing a broker to assess its financial viability. For this purpose there are various ratings agencies. Naturally, it is better to choose a brokerage company, which occupy the top positions in such ratings, which indicates a high level of reliability. It is advisable to make a list of the most trusted brokers and through its already choose the company with the appropriate terms of trade for you.

On top of that it is important and the physical location of the brokerage company. The fact is that you will need about once a month or quarter (depending on the conditions that offer certain brokerage companies) to come to the broker to the office to sign some reports. Naturally, it is desirable to choose a broker of your city. Some brokerage firms have offices in many cities, for a list of which can be on their Internet sites.

Speaking of the terms of trade offered by brokers, it must be said that they are offering different tariff plans, with a complex system of fines and fees, interest on depository services and rate loan for margin lending. All of this should be carefully considered, because the smaller the interest charges, the more money you can save. You also need to know about the existence of the minimum monthly payment and the amount thereof.

The most popular at the moment form of work with a broker - through the Internet. In this case, you set the application from your home computer or laptop from any location where there is a connection to the World Wide Web. Internet trading service provides almost all brokers. And there is a common way for applications - on the phone. Such orders are made using a password that will give you a broker. For reliability of the transactions in this way, all telephone calls are recorded.

To all this, you have to verify the contact information for customer support in place to provide advice, as on the specifics of the broker and the use of software for Internet commerce. Will be important for trade and margin lending conditions. By this term is meant making deals "with the shoulder," during which the possible purchase of securities with borrowed money or sale of securities, provided broker (open short positions). In carrying out the operation "with the shoulder," you can buy or sell the securities at a substantial amount than the one that is on your brokerage account. Therefore it is necessary to know how much will be paid for the use of leverage, and which securities will be able to provide you with a loan broker.

It will be useful to know about the additional services provided by the broker. This may be a free consultation and analysis, as well as news feeds. They can provide substantial assistance, important for beginners. You also need to consider the size of the minimum deposit is enough to participate in the bidding. Typically, brokers allow operations with deposits of 10-50 thousand rubles. After gathering all the information you need to analyze it and to choose a broker with the most appropriate for you conditions.

With tips for choosing a broker for currency trading in the Forex market, as well as a number of other trade finance instruments the stock market can be found in the relevant section of our news portal.

After choosing a broker with him now have to sign a package of documents for the provision of brokerage services for which it is necessary to take your passport and come to the office broker. As a result, your name will open a brokerage account and a custody account, which will be considered and you acquired the securities.

In addition you will be given the keys of electronic digital signature (EDS), used by the Internet trading and the password for transactions over the phone. Now you just need to put the money into the account. The money made as a cashier, and with the help of non-cash payments, depending on the conditions of the broker. Some brokers, for example, does not require a personal meeting for the contract - enough for them to sign your contract offer and then send a scanned copy by e-mail or fax.

And that's enough! Now you need to select and install the program to access the exchange. It will provide you with the broker. Once the software is installed, you can connect via the Internet to the server broker, and get the opportunity to carry out transactions on the stock exchange.

What kind of software will provide you with the broker? This may be the software of its own design, and versatile, with which will be able to trade through other brokers. To do this, brokers in the contract specify the list of programs that you can use.

We will not consider their own software development of individual brokers, since it is specific to each broker. We would not be advised to open an account with a broker who is a trader exclusively proprietary trading platform. Traders often change their brokers because of the differences, and re-re-learn to use the trading platform at each change of broker - not a pleasant pastime. Moreover, sales terminals, usually have a built-in programming language for writing scripts, indicators and expert advisors. It is better to learn a language in a universal trading platform than to relearn every time a new one.

Let's look at one of the most common by far trading platform - MetaTrader4 (MT4). It should be noted that on the Internet sites of brokers application to be installed on your computer may have different names, but be based on a single trading platform MT4.

MT4 Trading Terminal is a program through which you can gain access to the exchange trading system. MT4 software will allow you to send an application for the purchase and sale of securities, currencies, contracts for difference (CFD), futures broker's server, as well as track the status of their own funds. In the trading system is automatic execution of applications. MT4 trading terminal supports margin lending, and provides a range of other possibilities. The program interface is simple and intuitive. MT4 Client Terminal is the fourth generation of online trading platforms on the developer - the company MetaQuotes Software Corp. Due to the high level of automation of many processes and increase convenience and speed of the trader, the terminal is recommended for novice investors. All transactions (issuance and withdrawal of applications, transactions, etc.) occur in real time using real market data, all the delays are minimal. With the functions of the terminal MT4 is quick to read and proceed directly to the performance of operations.

To summarize, we say that a variety of programs for Internet trading, though have small functional differences in general are simple and functional, so the trade will suit any of them.
                                                       

                                                              Exchange trading scheme
For operations with securities broker you need to give an instruction to make the transaction on the exchange. In the past, orders were given over the phone, and now all the orders you can give the program through Internet trading. In such programs, the order is the application form, which contains the action, the number of lots and the asking price sale.


Let us see what is the mechanism of trading on the stock exchange. So, traders (investors) will give the application (do errands broker) to sell or purchase a variety of investment instruments (securities, etc.) of the selected value. The very sight of applications in different software varies, but the essence of all and one by reading a single interface, you can easily do the same in the other.

Trading on the stock market, you have to select the trading platform FORTS (special section RTS) or MICEX, the instrument (in the form of so-called ticker) that you as an investor want to sell or buy, the number of items selected tool and the purchase price and sales tool.

After setting the application on the stock exchange will be made automatically checks all the competing demands that are specified or better price (thus, for example, to sell searched counter orders with a price equal to or greater than specified in your application). Transaction occurs when such a counter claim is found. If no suitable bids, then your application will remain on the exchange, and will expect the appropriate counter orders well, or until you cancel.

During trading, at any time, the database is the exchange of all outstanding applications for sale (offers) and to buy (bids). It has the following form: offers are above (while not wishing to buy them so expensive), and below are bids (which was not wishing to sell so cheap). Typically, the interval between them is (spread). At the upper boundary of the spread is the best application for the sale, at the bottom - the best buy order. These requests, a so-called exchange nozzle having a shape shown in the figure.


As we said - are located at the bottom of a glass of exchange bids, starting with the highest price are issued to customers (in this figure bids for shares "RAO UES" have a maximum price equal to 10.985 rubles) to the lowest (10,971 rubles). Figures exchange glasses standing close by, indicate the number of lots that buyers are willing to purchase at the designated price.
At the top of a glass of fruitful exchange applications for sale (offers), starting with a low (below 10,986 it) to the highest price (11,005 rubles in our example), in which investors are willing to sell. Just as with bids - in front of the glass in the stock price indicates the number of lots.

On admission to the stock exchange sale application, in which the price higher than the maximum sales price, she immediately met by "eating" the appropriate volume of a piece of the application offers. Well, if the application is sent for sale at the best price with the purchase price, "eaten", respectively, the upper part of the bids.

In his exchange terminal, you can see the same exchange for a glass of selected tools. In the MetaTrader4 trading platform as a tool of exchange glass is not provided, since the platform was originally developed for trading in the Forex market, where, because of the high volatility, demand always meets proposal. However, the recently released Version 5 of the trading platform (MT5), where in addition to other improvements present and exchange the glass.




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