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Dealing room for traders. Dealing room

The crowd is unconscious and impulsive, and therefore dangerous. Especially when panic is in the air. In the financial market, such a crowd can ruin any trader if he cannot control his emotions. A dealing room is, first of all, a crowd comparable to a market square. Each of its participants has a significant impact (up to general panic) on those who are in the hall. And the fewer individuals make up the crowd, the faster it can be brought to a state of panic. Let's try to look at the examples of those feelings and emotions that arise in traders working in the dealing room.

Bazaar

From the first minutes of your stay in the dealing room, you involuntarily notice many coincidences with the usual clothing market. First of all, it is the presence of a large number of sellers and buyers, each of which has a desire to benefit. The buyer wants to buy low and the seller wants to sell high. At the same time, no one limits himself in expressions, voicing his arguments so that everyone around him can hear. The seller loudly explains to the buyer why his product is better than others, while he does not hesitate to compare himself, of course, in his favor with other sellers. The buyer seeks to get a discount, pointing out to the seller that this product is cheaper in the neighboring pavilion.

It is enough to replace market terms with exchange ones, and we will get a dealing room where sellers are "bears" and buyers are "bulls". A potential seller of goods can also be called a "bull" in the market, because he seeks to sell it at a higher price, because he expects the price to rise.

Making decisions

As you know, for profitable trading in the financial market, it is necessary to cope with emotions, fears and worries. Each transaction must be reasonable and in no case should be made on a wave of strong emotions or based on the opinions of other traders.

If the manager is not psychologically prepared and cannot control himself sufficiently, his trade will be unprofitable. He will suffer losses even if he has the most profitable trading system. But why is this happening?

Real life example

The case was several years ago.

Rustam, then still a young and inexperienced trader, discovered the stock market as a source of basic income. He began his trading career in a broker's dealing room. In addition to him, 10 people traded here, and everyone had different experience in the market. There were also traders with many years of experience who enjoyed high prestige among colleagues. Rustam's trading system was based solely on technical analysis, the rules of which he tried to follow unconditionally. Once she generated a signal to buy RAO UES shares at a price of 6 rubles. Rustam made a deal using leverage. At some point, an active discussion of the situation on the market began in the dealing room, and it mainly concerned the securities bought by Rustam. The hall was divided into two fronts: those who predicted a decline, and those who expected an ascent, like our hero. Experienced traders were on the side of the bears. With each tick, the noise in the hall increased, and representatives of each side tried to prove to their opponents that they were right in their expectations. Stock prices began to gradually decline. Those who bet on the fall (experienced traders) grinned: "We said that there would be a decrease, but you still bought." Rustam listened attentively and was very worried because his deal turned out to be unprofitable. As the downward movement continued, his feelings intensified. Meanwhile, in the dealing room, the "authorities" constantly reminded him that they were right. Rustam could not resist the surging emotions and sold the shares with a loss at a price of 5.88 rubles, justifying this by the fact that professionals are never wrong.

What happened?

Rustam succumbed to the "crowd effect". Psychologists have long proven that the crowd is unconscious and impulsive, and therefore dangerous. And if she is panic-stricken, she is doubly dangerous. Under its influence, the individual commits rash and therefore often wrong actions. As you know, in the financial market, the behavior of the crowd and each person individually is reflected in the value of a traded asset almost instantly. The crisis year of 2008 confirms this.

Traders in the dealing room, each of whom defended his own point of view on the future dynamics of the market, make up the crowd. Also, one cannot discount the influence of the authorities, who, in fact, led the crowd of "bears", which significantly affected Rustam's decision.

As stock prices declined, the "bulls" camp began to agree with the opinion of the authorities. "Professionals can't be wrong" - decided those who could not control their emotions, after which they moved into the camp of the "bears". In the future, they also quickly changed their opinion about the general trend in the market. And then they started talking about the continuation of the fall.

The result is obvious: Rustam could not restrain his emotions and agreed with the opinion of the crowd, which was headed by authorities. In this state, he completely forgot about the main thing: any transaction must be accompanied by analysis and calculations.

In our example, the crowd was wrong. Shares of "RAO UES" fell to the level of 5.84 rubles, after which a rapid growth began to the level of 6.25 rubles. But Rustam ignored the signals of his trading system. Succumbing to the influence of the crowd, he sold all the available securities and took a short position at a price of 5.90 rubles. Again loss and disappointment.

Risk management

In addition to the fact that the influence of the crowd often leads to spontaneity and thoughtlessness of decisions, traders forget about the need to manage risks. As you know, self-discipline, a trading plan and risk management are very important for profitable trading.
Buying RAO UES shares at 6 rubles and using leverage, Rustam was aware of the risks, and therefore, according to the system, when the price fell, he had to sell the papers at a stop loss at a price of 5.7 rubles. In this case, the loss would have been about 8%, since he used a leverage of 1 to 1.6. Instead, he sold the previously purchased shares for 5.88 rubles and in addition shorted the shares at 5.9 rubles using a leverage of 1 to 23. The leverage was increased to eliminate losses. Under the influence of the crowd, Rustam gained confidence that the trade was correct and did not take care of the stops. As a result, the subsequent rise in shares to 6.25 rubles with leverage forced him to close his "short" position at a significant loss.

In such situations, risk management, as well as self-discipline, often fade into the background. There is a feeling of absolute confidence in the correctness of a new transaction made on emotions. But if the principles of profitable trading, which were mentioned above, are not followed, the trader who made such an operation is doomed to substantial losses.

Newbie in the gym

It is much more difficult for beginners to work in the dealing room, as they cannot ignore external "noise" in the form of other people's advice and opinions of authorities. At first, it seems to every beginner that it is easier to work in the gym. For example, you can always ask for advice from a more experienced trader. And if all those present predict the direction of the trend in the same way, then you need to do exactly what the majority does. Therefore, a beginner, before analyzing the market on his own, asks for advice from more experienced traders, as well as from those who will be more convincing than the rest. However, he does not care to know the results of these people's own trading. After all, only stable profit is the true indicator of success.
As a result, after going through a series of losing trades suggested by colleagues to the audience, a beginner will understand that he should not rely on their advice, but it's time to think about an independent analysis of the market. But even if he develops a profitable trading and analysis system, he will not be immune from the influence of the crowd. First of all, because of psychology.

By the way, the story with Rustam ended with the fact that he was unable to cope with the "crowd effect" and decided to trade from home.

Safety regulations

To avoid such mistakes and the negative influence of the crowd, you should follow simple but very effective rules.

It is necessary to stop trading in the dealing room. It is better to carry out operations from home or another secluded place.
It is worth trusting your decision-making model (trading system) and always follow it. Such confidence can be increased by analyzing transactions already made on it, as well as testing on historical data. If the results are positive, confidence will grow and the trader will be able to ignore the "crowd effect".
You can not get involved in the discussion of the market situation. When working in the dealing room, you need to literally put on headphones and not be distracted from the trading process.
Engage in self-development and personal growth in order to increase confidence in yourself and your actions.

What is a dealing center: definition + essence of work + differences from brokers + 8 selection criteria + step-by-step opening of your DC.

Every day the number of people wishing to join trading on the famous Forex market is growing.

But not everyone will be able to enter the stock exchange directly, so if you want to master the profession of a trader, you will have to find out about intermediaries who will help in this matter.

There are two intermediaries that provide access to Forex, and today we will talk about one of them, and try to deal with the issue, what is a dealing center.

What is a dealing center?

So, there are two types of intermediaries in Forex:

brokers - directed to the foreign market;
dealing centers - carry out trading operations in the domestic market.

So, dealing center is a commercial organization that belongs to non-banking, and acts as an intermediary between traders and Forex itself.

Thus, it turns out that through this company you can enter the foreign exchange market and make trades on it.

The main characteristics of dealing centers (DC):

A dealing center is always a registered legal entity that has a license to operate in the foreign exchange market.
DC is essentially an exchange office, in the interests of which to attract as many small traders as possible. The more of them, the better for the center.
DCs are designed to work with traders whose deposits contain small amounts. Thus, the latter, for a certain fee (commission), have leverage and can carry out transactions.
The main purpose of opening a dealing center is to make a profit.
Transactions made through this intermediary are purely speculative.
The organization of work is carried out through special software: trading platforms or terminals.

I would like to draw attention to such a thing as speculation.

It so happened that in the CIS countries, many have a negative attitude towards everything connected with this term.

Speaking in the language of economics, this is nothing more than making transactions for the purpose of making a profit.

Types of dealing centers:

Dealing Desk (DD)

This includes organizations that form their own trading market, in which traders carry out transactions among themselves.

The task of the DC is to ensure the speed of exchanging one currency for another.

No Dealing Desk (NDD)

The centers provide trading directly on the Forex exchange, they are required to transmit orders for the execution of open orders.

This option of cooperation is more beneficial for traders than the first one.

The essence of the work of the dealing center and why is it needed?

Those who were interested in the principles of the Forex market know that only large financial institutions and intermediaries can trade on it.

Therefore, you can become an independent trader if you conclude a deal for at least five.

In addition, it is worth remembering that currency speculation is possible when at least several operations are carried out.

We don't think that every future trader has such sums, that's why dealing centers come to the rescue.

Thus, it turns out that any trader with a small amount of capital can join Forex trading.

And it is the DCs that enter the market and carry out trade transactions on their own behalf that will help him in this.

So, the transaction process is carried out as follows:

If you want to become a trader, you need to open an account in the selected dealing center and deposit your capital into it.

The account will be a pledge, and then you can get leverage from an intermediary.

The DC then provides the trader with access to the trading platform or terminal.

The trader watches the quotes and decides what to do with his capital.

This is called an order or a warrant.

The DC processes the orders of traders and enters the external market with them, acting on its own behalf.
If the deals were losing, then the clients bear the losses.
When they win, traders' accounts increase and they make a profit.

Due to the fact that the dealing center has many clients, it can carry out transactions directly between traders (one wants to buy, the other wants to sell), and this is how internal clearing is obtained.

As for the quotes of the currencies operated by the DC, the situation is as follows: the intermediary receives quotes from various information systems, after which he compiles his own.

The difference between the second and the first will be within a few points.

Working conditions of the dealing center

The spread is the difference between the selling price of a currency and its buying price.

Everything here is the same as in our usual exchange points: they sell the currency more expensive, they buy it cheaper.

This is where profit comes in.

Swap (loan terms)- percentage difference of credits.

If the transaction is carried out for more than a day, then the client pays a swap for each day.

Margin trading is used when a trader wants to carry out a certain transaction with a lack of own funds.

Then the DC provides him with leverage.

In case of loss, the client still pays for the service provided.

Other services - the provision of education, training, reviews and news of the foreign exchange market.

If you want to become a trader with the help of a DC, then be aware that it does not guarantee your successful activity.

It simply provides you with the opportunity to enter Forex.

The middleman is interested in your earnings, but also indifferent to your losses.

What are the differences between a dealing center and a Forex broker?

As mentioned above, in Forex as an intermediary, in addition to dealing centers, there are also brokers.

In essence, their activities are similar:

resellers operate on identical platforms;
receive commission and spread as profit;
market analysis uses the same tools and techniques.

But still, there are some important differences between them, according to which you can decide on the choice of an intermediary.

Comparison criterion	Dealing center	Forex Broker
Opportunity to bring a trader's transaction to the interbank market	No	There is
The minimum rate for working with an intermediary	It is possible to come to the market even with $100	10 000$
The possibility of insuring the client's account	No	There is
Benefit for the intermediary	When winning a bet, pays the profit to the trader from his "pocket"	Gets the spread regardless of losing or losing the bet

Criteria by which you need to choose a dealing center

Having dealt with the question of what a dealing center is, you can begin to study the criteria that you need to pay attention to when choosing it.

So, you need to take into account the following points:

Reputation and tenure

First, pay attention to how long the dealing center has been in existence.

A term of 3-5 years indicates that such an intermediary can be trusted, scammers do not work for so long.

Secondly, check the license, certificates and location of the DC.

Thirdly, look online for reviews of other traders who cooperate with a particular intermediary.

In any case, there will be negative responses, so analyze their relationship with positive ones.

Trade Mechanism

There are two options for how trading will take place:

via the Internet;
by phone.

A reliable dealing center provides an opportunity to carry out transactions in two ways.

The amount of starting capital

Despite the fact that it is this type of intermediary that allows you to enter the market even with minimal capital, many experts argue that it is best not to start trading with $100.

Earnings will be so minimal that you will quickly be disappointed.

Give preference to those intermediaries who want to work with capital from $2,000.

Working conditions

Also check if the intermediary has the ability to open demo, micro, mini, standard and VIP accounts.

Providing technical support

Any dealing center that values its reputation will stay in touch with its clients.

Therefore, see if the reseller has technical support.

It can be done both online and over the phone.

Number of transactions

The practice of limiting the number of transactions made is quite normal.

So, many centers have a provision on the minimum number of trading operations.

For example, you must carry out at least 25 of them per month.

If this condition is not met, you will lose all accumulated profit.

Deposit and withdrawal of funds

A self-respecting dealing center should provide its customers with the opportunity to replenish and withdraw funds through various payment systems: bank transfer, Webmoney, PayPal, QIWI.

Additional terms and bonus program

These include:

interest on free deposit;
return of the spread based on the results of successful trading;
various bonuses for additional transactions and more.

If some conditions do not suit you, or something has raised doubts, then look for more intermediaries.

Fortunately, there are quite a few of them on the market.

You can also try your hand at first by opening a demo account.

So you can "probe" the work of the DC and decide whether you need it or not.

How to open a dealing center?

So, you are no longer interested in being an ordinary trader, and you want to organize your own dealing center.

And of course, this idea is quite reasonable.

With the successful implementation of the project, you can get quite an impressive profit.

You have two options for opening a DC:

Opening your own center;
Creation of a branch of a well-known DC in your region.

Scheme of opening a dealing center: 4 main steps

First of all, it is necessary to make detailed calculations that will demonstrate the profitability of the future business.
Calculate the costs of registration, employee salaries, website creation, brand book development (an official document of the company).
Registration of a legal entity in accordance with the law
This includes the collection of permits and obtaining a license to conduct financial transactions.
Recruitment
You will need to hire competent specialists with specialized education and experience in a similar field.

Only with a large number of customers can you count on profit.
Since you will represent a young DC, you need to actively attract traders.
At first, you will have to spend large sums on promotion, so be prepared for this.

As for the registration of DCs, it is worth dwelling on a couple of points here.

The laws of Russia do not define the concept of Forex.

Therefore, as such, its activities are not regulated by the norms of the law.

However, the company still needs to be registered.

And this can be done by opening a center abroad, namely, in an offshore zone.

The following video will summarize what a dealing center is:

Thus, if you want to enter the foreign exchange market, you will have to learn what is a dealing center.

Without this knowledge, you are unlikely to succeed in Forex trading.

And first of all, this is fraught with the fact that you can stumble upon scammers who will quickly take your money into their hands and disappear.

Therefore, do not neglect the search for any information and carefully approach the choice of an intermediary, even though your future profit will not depend on it.

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Trading on the global Forex stock market is the most massive way of investing today. Investors received fundamentally new opportunities with the development of modern communication technologies and the Internet. Anyone can become a Forex investor. A trader, of course, must have the means and special knowledge for successful work, but this is not all that he will need. Directly on Forex...

Only large financial institutions and specialized intermediary organizations providing small investors (traders) can trade directly on Forex.

Intermediaries investing in various Forex financial instruments include dealing centers. These are non-banking organizations that provide margin trading services on Forex. Such trading is understood as the performance of trading operations, the profit from which is derived from the difference in exchange rates.

Let's talk in more detail about dealing centers: their functions, features, control of activities and principles of their choice.

Dealing centers (DC)

The reason for the appearance of dealing centers is the introduction of free conversion of world currencies in the late 70s of the last century. Actually, just then. Prior to this landmark event in the global financial system, currency exchange was carried out by large specialized institutions: banks, investment funds, transnational corporations, etc. After the currency began to be sold at "floating" rates, millions of individuals had the opportunity to trade in currency and earn on fluctuations in exchange rates. Dealing centers (DC) were formed to provide specific services to individuals in inter-currency Forex transactions.

In the correct understanding, Forex is the global currency market, but, in relation to our topic, we will mean speculative currency trading under this name.

"Speculative trading" - a concept that has a traditional negative meaning for our country, actually means the acquisition of currency not for use, but for subsequent sale at a higher price in order to make a profit. For example, when buying $5,000, a trader does not spend it on business, making loans, or purchasing goods, but waits for the value of the dollar to rise in order to sell and profit from the difference in the price of buying and selling the currency. This is the meaning of speculative trading.

Why can't a trader do without an intermediary?

The broker cannot trade Forex directly. Participation in the auction is provided to him by intermediaries - a brokerage company or a dealing center. The fact is that the volume of the supplied currency on Forex under the minimum contract should be $5 million. For this reason, only large market participants work with real deliveries.

Forex deliveries occur every other business day (spot deliveries). The high cost of each operation also excludes the possibility of direct work of a trader with a small account on the exchange. Therefore, on behalf of many individual traders, an intermediary is presented, accumulating their funds and acting on his own behalf and at his own expense. Dealing centers and brokerage companies earn commissions, which they take from traders for each trading operation, or on the spread - the difference between the buying and selling prices of a currency.

The number of small investors in dealing centers is huge, and the operations carried out are multidirectional. Therefore, inside the center, a situation arises of internal offsetting or clearing, which allows you not to go out with operations on Forex itself and save on transaction fees.

Formation of quotations in dealing centers

The sale of currency in the Forex market occurs in unlimited volumes and in all directions. There is no body that regulates currency trading, and prices are formed solely by supply and demand. Fundamentally, the work of Forex differs little from the work of the exchange office of a commercial bank, where exchange rates are determined solely by market demand and supply.

The formation of currency quotes in dealing centers takes into account the flow of quotes from the world's leading information systems Reuters, Bloomberg and some others. Each brokerage company generates currency quotes according to its own methodology independently. Quotes may differ from each other by a couple of points, but following the general principles of formation is obvious. Any dealing center, regardless of its location, generates currency quotes based on the analysis of information from open Forex information sources and the Internet.

Forex transactions

Transactions are carried out using special computer programs called trading platforms. Trading platforms can be of different types, but MetaTrader, Rumus, ActTrader are especially common. Each platform, regardless of the variety, has the main function - the ability to open and close traded currency positions.

A trader downloads the platform to his computer while opening an account in a dealing center or brokerage company. Mobile trading and the web interface have brought new opportunities to expand the functions of trading platforms. Modern platforms have ample opportunities for analyzing currency quotes, built-in programming languages and other functions.

Regulation of the work of Forex intermediaries

The regulation of currency quotes on Forex, we repeat, is free and concerns the relationship of traders with dealing centers. National banks of states can adjust quotes at their discretion for a certain impact on the economy. In developed countries, the activities of dealing centers are tightly controlled by special government organizations. In Russia, the formation of legal structures serving traders is only in its infancy.

The concept of a brokerage company and a dealing center has not yet been defined by law, therefore, most of the companies of this profile are registered abroad - in EU countries or offshore. This situation is in the interests of the client, since registering a company in a country with developed legislation guarantees better service.

Broker or dealing center: who to choose?

A trader who chooses an intermediary for Forex trading will make a choice between a trading company and a dealing center. What is the difference between these organizations if their main function is the same - providing services for Forex trading. And the difference, meanwhile, is significant.

In the dealing center, traders work under the conditions of internal clearing. Trade there is carried out in small amounts with a large number of traders, so transactions are not withdrawn outside the center. The vast majority of dealing centers consider large investors as a potential threat to their own well-being.

The reason is simple: the dealing center will have to pay the large profit to the investor from its own funds. Thus, a dealing center is an autonomous company operating on its own behalf in the internal clearing mode and generating currency quotes based on data from major news agencies. For services, the dealing center charges an operating commission or a spread.

A brokerage company, unlike a dealing center, provides intermediary services to a trader with a possible direct access to the foreign market. The broker provides the trader with the opportunity to trade not only on the Forex currency market, but also on other stock markets. Unlike a dealing center, it does not matter for a brokerage company what amounts a trader is going to operate with, since it is not limited to internal settlements.

Most traders prefer brokerage companies, although in each case the choice is individual.

Choosing a dealing center (DC)

Conditions for trading in dealing centers differ slightly. The difference mainly concerns the terminals used for trading and commission rates. When choosing an intermediary in Forex trading, a trader must evaluate it according to the following criteria:

business reputation of the company;
time on the market;
country of registration and jurisdiction of the contract;
trading conditions (spread, deposit and withdrawal of funds, etc.).

On specialized sites on the Internet, you can get acquainted with the ratings of dealing centers and traders' reviews about their work. Before making a final decision on opening an account, it is recommended to try out the work of the center on a demo account.