Unconsciously, foreign exchange speculation has become the third largest investment and financial management method in China after stocks and futures, and its rapid rise and spread time is much shorter than the first two. The reason why it is so sought after by investors is because of its high profit, high return and high short-term income. Although it is accompanied by high risks, it is often easily overlooked by investors. You need to master some knowledge to avoid risks and get higher returns. Rushing into the market will only make the participants break their heads or even lose their money, so the preparations must be in place.

First of all, the basic reasons of foreign exchange transactions need to be grasped, which can be traced back to the foreign exchange transactions of banks. At first, some people wanted to make use of the exchange rate changes between their own currencies and foreign currencies to earn the difference. For example, someone has 650 million yuan, which is converted into 10000 dollars at the exchange rate of 6.5 against the US dollar, and then converted back to RMB at the exchange rate of 6.6, which is 66,000 yuan. So as to earn the price difference of 1000 yuan, which is the basic principle of foreign exchange trading, but at the same time we see two shortcomings. First, it takes more money to earn 1000 yuan. Doing any business casually, 65,000 yuan not only earns 1000 yuan, but is very overqualified. Secondly, it takes a long time. Let's look at the exchange rate of RMB against the US dollar. It takes a long time to rise from 6.5 to 6.6. The general calculation method of exchange rate is followed by four decimal places. So we think this is an increase of 1 1,000 points, which is equivalent to 1 point profit 1 dollar. These two shortcomings alone are enough to make many people daunting. The core principle of foreign exchange speculation we are talking about here is the above method.

After understanding the principle, let's take a look at several concepts that need to be mastered in the introduction of foreign exchange speculation, such as leverage, spread and margin trading. When we talk about the principle of foreign exchange trading in banks, we say that it needs high funds and the exchange rate fluctuates slightly, so it is difficult to make a profit. But at this time, if we give a leverage to foreign exchange transactions, it will be expanded by dozens or hundreds of times on the original basis, for example, giving banks a leverage of 100 times. Then the profit is10000 *100 (6.6-6.5) =1000000 RMB. Under the same circumstances, you can get such a high profit. This is the principle of margin trading, that is, if you also use foreign exchange trading and then participate in trading through the foreign exchange platform, there will be 100 times invisible leverage. Then when we want to earn 1000 RMB, we only need 650 RMB, or in the case of 65,000 RMB, we only need to increase it from 6.5000 to 6.50 10. Such a high profit is the charm of foreign exchange margin trading. The spread means, for example, at this time, you converted 6.5000 into dollars, but you actually bought it through the foreign exchange platform with 6.5003. These three points are the spread and the handling fee of the foreign exchange platform. Of course, this is not worth mentioning for foreign exchange margin trading. It can be seen that the advantages of speculating in foreign exchange are that it requires less funds and less time to make profits.