1.0 Introduction
In economic literature, the individual terms used interchangeably or in similar contexts, so it is necessary to distinguish detail to define and explain, in order to understand their interconnection and relationships. Some terms below are important for traders because fundamental analysis can help to create better technical analysis.


Figure 1: Introduction

2.0 Stock market and Burgernomics
From the very beginning, the stock market is tied to a specific place - a meeting place of traders / intermediaries, who are between themselves traded in certain period of time and by the rules that are established. On the stock exchanges are traded cash and goods, according to the trade exchange are divided into effective, merchandise and mixed. On the first trading securities, foreign exchange and financial derivatives, other goods, and on the third one and the other. The subject of trading on the stock exchange must always be standardized. Another characteristic of stock markets, the absence of cases of trafficking from where it traded. Rules of exchange on the stock exchange markets have a dual function - to provide all the detailed eye standardization items and trading rules, as well as to provide protection to participants in trading. Protection against market risk is the main reason for the institution of the stock exchange, so that it is subordinate to the organization of trade on it.

One of the terms that I learned very late was Big Mac Index. This index measuring the deviation of the market exchange rate from the rate which would have been determined based on the concept of purchasing power parity (Purchasing Power Parity - PPP). Big Mac index was introduced known Journal The Economist, and given the popularity he had gained the whole analysis of exchange rates and price movements in the lands called the Burgernomics. According to the concept of purchasing power parity, the exchange rate should be constantly changes and adapts. When calculating the Big Mac index, does not use the bundle but only one product - a Big Mac hamburger, and so to calculate how much should be at the exchange rate of one currency against the US dollar to the price of a Big Mac was the same in the country and the United States. In particular the price of the Big Mac in Canada, would be granted to the price of a Big Mac in US dollars and got to the relationship of Canada CAD currency and the dollar. Comparing it with the official exchange rate would see whether the CAD is overvalued or undervalued in relation to the dollar. In recent years, the Big Mac index shows that the major trading and strategic partner of the United States constantly have overvalued exchange rates of their currencies (this primarily refers to Great Britain, Japan, Israel and Europe).


2.0 Figure : Burgernomics definition

3.0 What is the difference between a stock broker and dealer?

In the first days of trading I released that brokers have to permit access to the stock exchange and are authorized to conclude stock exchange transactions as buyers and sellers. The activities carried out in their name for the account, on behalf of the principal. Principal in this way may remain unknown (which depends on the rules that apply to certain organized market), Stock brokers (brokers) do not bear risk and may not provide guarantee for end result and work. They do business only with other authorized intermediaries, and the subject of trade can only be goods and securities that are officially registered at the stock exchange. Brokers are specialists in the type of work or the subject of concern. Brokerage is usually determined to as the percentage of completion of transactions, which decreases with increasing value of the transaction.

Dealers
are one of the most important categories of authorized players on the market. They trade using own accounts, which means that they alone bear the risk. When buying from a dealer on the stock exchange, customers receive assets from the portfolio of the dealers. Most dealers carry out brokerage business for their clients. Therefore, the common name is broker-dealer.


3.0 Figure : Broker vs. dealer - definition from school book


4.0 Central Bank and FED
In the modern market economy, the central bank is the lead institution of credit - monetary system. Central bank functions are to ensure the smooth functioning of the banking - financial system and monetary policy, that is controlled by the amount of money in circulation in function of providing low inflation without causing high unemployment. The Central Bank is in all the monetary system in the world has continued to maintain the previously acquired monopoly rights to perform the creation of base money. Governor of the Central Bank sets a pair of lament,Yet the ever-expanding circle of those who believe that a stable currency base of a prosperous economy and the use of monetary policy to finance the budget deficit, reducing unemployment, etc.

4.0 In December we can see interest rate increased for USD which can change forex market
FED (shorter name for the Federal Reserve System) is a system of financial institutions, which was established in the United States, in 1913, to take over the role of central banks, and whether the formation of a more comprehensive system framework for the control of commercial banks and all financial flows. FED is constructed as twelve Federal Reserve banks, which are responsible for the daily operation of the financial system in their areas - districts. FED is managed by a Board of Governors, based in Washington. FED controls and monitoring of movements between the dollar and other currencies. In its work, the Fed has achieved great independence, but due to the importance of moves and decisions made within the Fed, often under pressure from the public. Many investors, in order to avoid possible negative market movements at regularly monitor decisions made by the Fed, primarily those relating to the interest rate prescribed by. The interest rate is indicator of the condition of the American mind to the economy.

5.0 Diversification of risk
Diversification of risk is part of the investment policy of investor capital. Its aim is to achieve as greater risk protection that by investing in securities of a single issuer not suffer a loss due to its bankruptcy. Fund dedicated to investing in Hart of the best values ​​is divided into several kinds of paper, to reduce the risk of investment reduced to the minimum. Therefore, the available funds are invested in domestic and foreign securities. Various investment opportunities are evaluated on the basis of yield and size make risk. The Stock Exchange of capital are inexpensive and easy to diversify risk by purchasing different securities (different issuers). Excessive risk diversification however, reduces profit in future.

5.0 Diversification definition

6.0 Conclusion
Huge spikes, strong trends we can see after important news from Central Banks. some terms can be very important when we open new account and asking for new services such as that dealer company engaged in the trade of securities in its own name and for its own account (at its own risk), until then the brokerage firms doing business exclusively in the name and for the account of their client. This article can be very interesting for new traders and maybe it will help new traders to read more books about fundamental analysis, learn new terms.
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