forex question?
Posted on May 27, 2010 under Currency Trading Software |How is the value of currency calculated? I don’t want answers like, (interest rates, or supply/demand). The new york exchange market is calculated by software written by people in the new york exchange market. Since the currency trade is open in many different countries, how is it calculated, does the software that tokyo use, different than in london? ect. Not sure if i asked this right, but I am wondering if there is some type of software that all banks share, and is it written by a european? 
Follow up. The new york exchange deals with stocks. What exchange deals with currency?
There is no centralized market for currency trading, in New York, or anywhere else. It is a dealer-dealer market.
The price of a currency 1 in another currency 2 is whatever someone with currency 2 is willing to give for it. If somebody wants Mexican pesos and has US dollars to give, they are going to have to pay about 9 cents, regardless of whether they are in Chicago, New York, London or Tokyo. Location is irrelevant, because deals are settled electronically without shipping costs.
This is an auction market, which means supply and demand. I’m sorry if you don’t like that answer.
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March 27th, 2008 at 7:33 pm
I am not sure what this question is even asking???
What do you mean that the new york exchange market? Do you mean the new york stock exchange. If that is the case prices are based on supply and demand and who is willing to buy and sell at certain prices? Not by software. Trading in the currency market would work the same way. I think the premise of your question is way off.
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March 27th, 2008 at 8:26 pm
There is no centralized market for currency trading, in New York, or anywhere else. It is a dealer-dealer market.
The price of a currency 1 in another currency 2 is whatever someone with currency 2 is willing to give for it. If somebody wants Mexican pesos and has US dollars to give, they are going to have to pay about 9 cents, regardless of whether they are in Chicago, New York, London or Tokyo. Location is irrelevant, because deals are settled electronically without shipping costs.
This is an auction market, which means supply and demand. I’m sorry if you don’t like that answer.
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Employed in computer deparment of international bank supporting foreign exchange trading.
March 27th, 2008 at 8:29 pm
The Forex marketplace is different from the stock market in that trading of currencies occurs in many different places in many types of organizations. The main centers are London, New York, Tokyo and Singapore, but there are many others.
It’s sort of like the OTC stocks in that there is no single central exchange. Trades happen between any two (or more) parties that want to trade.
Reported prices derive from the largest participants in the exchange market, which are international banks. They voluntarily report their trade figures as a guide for the market.
This may mislead the individual investor, since the bid/ask spread for the largest banks are quite smaller than the bid/ask spread that an ordinary individual would get from some forex dealer. (In fact, bid/ask spreads are how those dealers make their money, even though novices don’t pay attention to the spread much.)
As a small individual investor, you would be part of the "retail forex" market. See this good Wiki article for more info:
http://en.wikipedia.org/wiki/Retail_forex
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March 27th, 2008 at 11:01 pm
see these website maybe they can answer ur questions
http://www.universalmarkettrader.com:
http://www.netpicks.com
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