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How does the wholesale foreign exchange market actually work?

getmondo.co.uk

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Re: How does the wholesale foreign exchange market actually work?

#11

Post by whatok »

iyn wrote: post #2

From someone who has absolutely no idea how the markets work and what are the 'mechanics' behind the stock markets, economy etc: what is the good/productive way to learn about such things? The linked article provides some explanation, but I still don't feel that I 'feel'/truly understand the topic. I'd recommend books/videos/articles recommendations.

This is a great overview done by Ray Dalio, founder of Bridgewater Associates; one of the world's largest hedge funds.

"Created by Ray Dalio this simple but not simplistic and easy to follow 30 minute, animated video answers the question, "How does the economy really work?" Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur."

https://www.youtube.com/watch?v=PHe0bXAIuk0

Re: How does the wholesale foreign exchange market actually work?

#12

Post by henrik_w »

iyn wrote: post #2

From someone who has absolutely no idea how the markets work and what are the 'mechanics' behind the stock markets, economy etc: what is the good/productive way to learn about such things? The linked article provides some explanation, but I still don't feel that I 'feel'/truly understand the topic. I'd recommend books/videos/articles recommendations.

I haven't had time to watch yet, but Khan Academy has a lot of presentations here: https://www.khanacademy.org/economics-finance-domain/core-fi...

Re: How does the wholesale foreign exchange market actually work?

#13

Post by bboreham »

Symbiote wrote: post #10
bhouston wrote: post #5

I can not imagine it is that good of a deal as I get calls about people wanting to help me with my foreign exchange on a monthly basis for many years now. There is not topic that I get more cold calls on than this. This suggests to me, this means it must be fairly profitable for those companies offering it, and that profit likely would come out of my pockets, but I haven't done the analysis. That said, I know my bank…

I transferred some savings last year, because I emigrated. All the normal British banks offered very poor exchange rates. Traditional money exchange sites, which seemed to target people making large foreign purchases (houses etc) or people looking to invest in foreign currency were better, but as soon as I signed up on the website I received calls from their staff, which annoyed me. In any case, the rates were still…

> Transfers with TransferWise aren't instant, they wait

Do note that if the market moves a long way while they are waiting they will cancel the entire transaction.

This is a very different product to the one offered by your bank. Your bank takes some risk (and they charge a huge premium which more than covers it); TransferWise makes you keep the market risk.

Most days this makes no difference. On a day when everybody is trying to move money in the same direction, you will notice.

Re: How does the wholesale foreign exchange market actually work?

#14

Post by simonhudson »

Symbiote wrote: post #10
bhouston wrote: post #5

I can not imagine it is that good of a deal as I get calls about people wanting to help me with my foreign exchange on a monthly basis for many years now. There is not topic that I get more cold calls on than this. This suggests to me, this means it must be fairly profitable for those companies offering it, and that profit likely would come out of my pockets, but I haven't done the analysis. That said, I know my bank…

I transferred some savings last year, because I emigrated. All the normal British banks offered very poor exchange rates. Traditional money exchange sites, which seemed to target people making large foreign purchases (houses etc) or people looking to invest in foreign currency were better, but as soon as I signed up on the website I received calls from their staff, which annoyed me. In any case, the rates were still…

I've been studying on the continent now (from the UK) for the past year and a half and I've mainly used TransferWise to send money. When I first used it about a year and a half ago they took 2 to 3 days to send money, now if I order in the morning I usually get it just after lunch. Incredibly fast and competitive rates for low prices.

For example: Natwest charge you something like £30 to send money within the EU urgently within 1 to 2 business days. Their slow one take 2 to 4 days and still costs £10. By contrast TransferWise charged me £2.50 last time I sent £450. Presently TransferWise offer a GBP to EUR rate of £1 to € 1.3404, by contrast Natwest offers £1 to €1.3077.

Re: How does the wholesale foreign exchange market actually work?

#16

Post by adwn »

bluedino wrote: post #15

Is private forex trading as lucrative as it seems? People online seem to be making consistent, solid returns on relatively small investments (you can start out with < $100k)

> People online seem to be making consistent, solid returns on relatively small investments

I seriously doubt that. Realistically, Forex trading is gambling [1], and gamblers tend to be loud about their gains and silent about their losses.

[1] Note that this doesn't necessarily mean that it's random chance – Poker is also gambling and depends partially on skill, not only luck.

Re: How does the wholesale foreign exchange market actually work?

#17

Post by scrollaway »

BillinghamJ wrote: post #7
scrollaway wrote: post #6

Since their blog is coming up, asking HN: Mondo is looking like an interesting bank. I've had my eyes on both them and Simple for a while; unfortunately, I'm not in the UK anymore nor in the US so I went with Number 26 instead. Anyone have any experience with either?

I live in the UK and have had a Mondo card for about a month and a half. I've been very pleased with them so far, and there is clearly a big opportunity for them to bring some innovation to traditional banking. Any specific questions?

What's your experience been compared to traditional banks? Where do they differ the most?

Have you been disappointed by anything yet?

Have you tried them outside the UK / withdrawing euros?

How's their human support?

Re: How does the wholesale foreign exchange market actually work?

#19

Post by phillc73 »

scrollaway wrote: post #6

Since their blog is coming up, asking HN: Mondo is looking like an interesting bank. I've had my eyes on both them and Simple for a while; unfortunately, I'm not in the UK anymore nor in the US so I went with Number 26 instead. Anyone have any experience with either?

I tried to open a Number 26 account. After going through, and passing, their KYC process I found out the account could only be activated through their app. That is despite lack of clarity in their documentation, which I believe clearly suggest activation can be completed online through a browser.

Guess what? Their Android app can only be downloaded through Google's Play Store. I'm running CyanogenMod on my phone without gapps installed, so there was no way forward for me.

Number 26 even sent me a debit card in the post, which I couldn't activate.

Re: How does the wholesale foreign exchange market actually work?

#20

Post by ant6n »

Symbiote wrote: post #10
bhouston wrote: post #5

I can not imagine it is that good of a deal as I get calls about people wanting to help me with my foreign exchange on a monthly basis for many years now. There is not topic that I get more cold calls on than this. This suggests to me, this means it must be fairly profitable for those companies offering it, and that profit likely would come out of my pockets, but I haven't done the analysis. That said, I know my bank…

I transferred some savings last year, because I emigrated. All the normal British banks offered very poor exchange rates. Traditional money exchange sites, which seemed to target people making large foreign purchases (houses etc) or people looking to invest in foreign currency were better, but as soon as I signed up on the website I received calls from their staff, which annoyed me. In any case, the rates were still…

I wish their "see how" section would explain how it actually worked (including what the source and destinations can be), rather than just telling me it's cheaper than the banks. The site seems to want me to sign up before even giving any hint what's required; that's not an on-boarding experience that my 15seconds of curiosity will work with.
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