1, the cross currency pair is produced to solve the actual exchange problem in the offline foreign exchange market. If you want to travel from Europe to Japan, you must change euros into dollars, and then change dollars into yen.
2. Cross-trading is a method often used by real investors in the foreign exchange market. When direct trading is locked up, many investors are unwilling to stop loss and choose cross trading. It should be said that if used well, cross-plate operation can effectively reduce the cost of holding positions and make the locked positions untied faster.
1. Cross-trading is a kind of liquidation method often used by real investors in the foreign exchange market. When direct trading is locked up, many investors are unwilling to stop loss and choose cross-trading to solve the problem. It should be said that if used well, cross-plate operation can effectively reduce the cost of holding positions and make the locked positions untied faster. In the foreign exchange market, the exchange rate is based on the US dollar. The relative exchange rates of two currencies other than the US dollar are crossed, such as the euro against the British pound and the Australian dollar against the Japanese yen.
2. Trading advantages: First, you can use the locked currency as your local currency to buy the most powerful currency in the current market. In this way, through the band operation of the cross-disk, more and more local currency will be in hand, and the cost of natural positions will be further reduced, and finally the solution and even profit will be realized. Second, the cross-market has a relatively large fluctuation space, and any currency can be traded freely. As long as you grasp it well, there are many opportunities to make money. After cross-profit, you can choose to return to the original currency or directly return to the US dollar, which is very flexible. Third, the cross-transaction operation is a direct transaction between two non-US dollar currencies, which can reduce the spread and transaction cost without using US dollars.
3. Trading disadvantage: Everything is two-sided, and there are inevitable disadvantages across tables. If it is not used well, it will cause new losses. The risks of cross-trading are as follows: first, the biggest risk of cross-trading is the sharp rise of the US dollar. The linkage between non-American currencies is very obvious. Once the dollar rises strongly, all currencies will inevitably fall, so it will be very difficult to operate between tables, and depreciate synchronously with the rise of the dollar. The end result is the deeper the lock. Second, because investors are not familiar with the cross-plate, there is a greater possibility of operational errors, which will also cause the cross-plate to lose more and more money and increase the degree of lock-up. Based on the above analysis, investors must adhere to three principles when crossing: first, avoid crossing in the case of a strong dollar, and stop at the first time to minimize losses. Second, in the case of large fluctuations in the US dollar, we must resolutely stop cross-trading, and adopting direct band trading can save ourselves more than cross-trading. Third, only when the US dollar exchange rate is relatively stable and operates in a narrow range is the best time to cross. Cross-trading is not the "master key" to solve the problem, but it is commonly used, so investors should be cautious when they are not sure.