What Is Foreign Exchange Trading?

Foreign exchange margin trading, also known as foreign exchange speculation, refers to signing a contract with a (designated investment) bank, opening a trust investment account, and depositing a fund (margin) as a guarantee. The (investment) bank (or Brokerage banks) set credit operation limits (that is, leverage effects of 20-400 times, exceeding 400 times is illegal). Investors can freely buy and sell spot foreign exchange of the same value within the quota, and the profits and losses caused by the operation are automatically deducted or deposited from the above investment account, so that small investors can use smaller funds to obtain larger transaction limits. Like global capital, it enjoys the use of foreign exchange transactions for risk aversion and creates profit opportunities in exchange rate changes. In summary, foreign exchange speculation is an investment act.

Forex Margin Trading

Foreign exchange margin trading, also known as foreign exchange speculation, refers to signing a contract with a (designated investment) bank, opening a trust investment account, and depositing a fund (margin) as a guarantee. The (investment) bank (or Brokerage banks) set credit operation limits (that is, leverage effects of 20-400 times, exceeding 400 times is illegal). Investors can freely trade the same value within the quota

Novices can understand and learn a few suggestions for getting started:

1. Master the necessary basic knowledge, it is recommended to look at the free e-book of foreign exchange technology;

2. We must choose a mainstream platform; (regulated by FSA or NFA, explain whether their operation and capital flow are standardized and serious, which guarantees our safety. FSA supervision in the UK is the most stringent)

3. Choose a good agent, preferably a first-level agent. At the regular level, word of mouth is slowly settling, so the operations are very regular. No commissions and other fees, timely service and professional quality, and also guarantee the safety of your funds;

4. It is important to set stop losses and control positions when trading;

5. Maintain a good mentality, and profitability is normal. (Note: You also need to know some basic foreign exchange knowledge.)

Basic knowledge

Currency symbol for forex margin trading

Currency symbol, we must first understand which currency pair to speculate. Currency pairs are in English and I do nt understand what to do. Below are some currency symbols. Foreign exchange speculation is the ratio of any of these two currencies, that is, the exchange rate. Earn profits based on an increase or decrease in the exchange rate ratio.

US Dollar (USD) Euro (EUR) Japanese Yen (JPY) British Pound (GBP)

Australian Dollar (AUD) Canadian Dollar (CAD) New Zealand Dollar (NZD) Swiss Franc (CHF)

Knowing the name of a currency is a necessary basis for getting started. We need to know what foreign exchange trading is. for example

1. What is foreign exchange trading? Foreign exchange transactions refer to the exchange of the currency of one country with the currency of another country. This should not be difficult to understand. When traveling to the United States, you must exchange RMB for US dollars. And when you go to the bank, and will follow according to prevailing exchange rate conversion, such as: USD / CNY = 7.76 means that 7.76 RMB yuan can buy $ 1.

2. What is an empty one, what is more than a single? What are the short and long on meaning? - buy more short-selling

Investment process specific transactions, and that is more than empty, or as long on empty.

That is, foreign exchange revaluation / devaluation. With AUD / USD (AUD / USD), for example. If the current price is around 0.8375, namely 1 Aussie dollar 0.8375. If you think that this time the Australian dollar will continue to appreciate, you can buy (and more) AUD / USD at current prices, the appreciation of the Australian dollar to 0.8420 after a week, you open knot Lee, that earned 45 points. But if a week later, the price dropped to 0.8225, then you lose 150 points. Of course, if you do not think the Australian dollar continued to appreciate, if you choose to sell (empty) AUD / USD, then you will earn 150 points at 0.8375 time. Accustomed to the foreign exchange deficit to win in order to count the number of points, and finally to the corresponding US dollars are translated according to the platform.

The smallest unit of exchange rate changes - Point (PIP), spreads

Exchange rate generally five digits, the last digit 1 change, changes in the minimum exchange rate, known as 1:00.

The difference between the bid and offer prices called the spread

The smallest unit of margin trading. If it is a standard account, the broker on the trading unit of the general provided by the network volume is 1 lot (lot) of 100,000 base currency. If it is a mini account, the transaction is a first-hand account of the 1/10 standard.

For example, single-handedly traded USD / JPY actual turnover is equivalent to the actual buy (sell) $ 100,000 dollar / yen.
If you are single-handedly EUR / USD, the actual volume is equivalent to the value of 100,000 euros euro / dollar.

Trading foreign exchange margin trading contracts

The use of internationally accepted "K" as a $ 1,000 "thousands of dollars" to represent the total amount of money trading contracts.

For example, 100K contract account is 100 "thousands of dollars" that 100,000-- one hundred thousand dollar account.

This 100K accounts, also known as "standard account."

There is also a 10K contract account is 10 "thousands of dollars", that 10,000-- ten thousand dollar account.

This 10K account, also called a "mini" account, is a MINI account.

Another is called "Professional Account" which is 250K, which means the amount of funds is 250,000 US dollars.

Some companies also set up "intermediate" accounts, such as 50K accounts.
That said, it's somewhere between standard and mini accounts.

Leverage for Forex Margin Trading

Generally, brokers will provide leverage ranging from 10 times to 400 times. Relatively speaking, Jinhui Network provides a simulation that can simulate 10 times the leverage requirement of 10%, and 100 times leverage requirement is 1%. So on and so forth. Leverage (MARGIN), it refers to the ratio of your overdraft funds and the minimum margin required for you to trade a single order. Judging from the proportion of international traffic, from 10 times to 500 times.

10 times leverage, MARGIN = 10%, that is, if you open a transaction, you need to pay 10% of the contract's total funds as a guarantee.
50 times leverage, MARGIN = 2%, that is, you open a single transaction, the funds required to pay 2% of the total contract as a guarantee.
100 times leverage, MARGIN = 1%, you open an order, only need to bear 1% of capital guarantee.
200 times leverage, MARGIN = 0.5%, you open an order, you only need to bear 5 thousandths.
400 times leverage, MARGIN = 0.25%, you open a single order, only need 2/5000.

After learning to get started. We need to understand the timetable of foreign exchange gold trading.

transaction hour

Although the international foreign exchange market is a 24-hour trend chart of spot gold that operates continuously 24 hours a day and night, exchange rate fluctuations in one market can quickly spread to other markets, but each market has its own different characteristics.

The Sydney foreign exchange market is one of the earliest foreign exchange markets in the world every day, and the trading time is about 6: 00-14: 00 (Beijing time). Usually the exchange rate fluctuations are relatively calm, and the trading varieties are mainly AUD, NZD and USD.

The trading varieties in the Tokyo foreign exchange market are relatively single, mainly concentrated in the yen against the dollar and the yen against the euro. As a large exporting country, Japan's import and export trade is relatively concentrated, so it is vulnerable to interference. Trading hours are approximately 8: 00-11: 00 and 12: 30-16: 00 Beijing time. There are many types of currencies traded on the London foreign exchange market, often more than thirty, of which the largest transaction is the pound-dollar transaction, followed by the pound against the euro, the Swiss franc and the Japanese yen. Its trading time is about 17:00 Beijing time to 1:00 the next day.

In the London foreign exchange market, almost all major international banks have branches here. Because they are connected to the New York foreign exchange market's trading hours, they are the main ones from 21:00 to 1:00 the next day. The most active stage of currency fluctuations.

The New York foreign exchange market is one of the important international foreign exchange markets, and its daily trading volume is second only to London. At present, more than 90% of the US dollar transactions in the world are finally settled through the New York interbank clearing system, so the New York foreign exchange market has become the international settlement center for the US dollar. Except for the US dollar, the trading currencies of the major currencies are Euro, British Pound, Swiss Franc, Canadian Dollar, and Japanese Yen. Its trading time is approximately 21:00 Beijing time to 4:00 the next day.

Closing time

Major international

Although foreign exchange deposits are among the top products in personal wealth management products globally, but because the domestic has not yet established a sound and standardized system, during the blind development of futures markets from 1992 to 1993, many Hong Kong foreign exchange brokers immediately To conduct foreign exchange futures trading business in mainland China. And attract a large number of domestic enterprises and individuals to participate. Since the vast majority of domestic participants do not understand the foreign exchange market, blind participation has resulted in a large number of customer losses, including a large number of state-owned enterprises. Subsequently, in August 1994, the China Banking Regulatory Commission and other four ministries and commissions jointly issued a document to comprehensively ban foreign exchange futures trading. But at the end of 1993 this period, China Banking Regulatory Commission began allowing domestic banks to carry out individual-oriented foreign exchange trading business. With the ban on foreign exchange margin trading, real foreign exchange trading has become the only way for individual investors to invest in foreign exchange. By 2003, with the US forex broker gradually on the right track, and accept supervision, many forex brokers continue expanding into China, which also continue to stimulate the Chinese banking sector.