[foreign exchange] originally refers to the currency exchange rate. Simply put, the exchange of one country's currency for another is called foreign exchange; That is, the relationship between countries, trade, investment, tourism and other economic exchanges between countries cause the payment between currencies. Because the currencies of different countries are different, when you pay abroad, you must first convert your own currency into foreign currency, or receive foreign foreign currency and then convert it into local currency, in order to circulate in China, thus creating the relationship of currency exchange.
The foreign exchange market is an advanced telecommunications network, which is not limited by time and space, and trades through electronic communication equipment. The foreign exchange market is a huge international trading market, and the price of foreign exchange will change with the supply and demand of different currencies in the China market, so it is not easy to be manipulated, and the trading time is almost 24 hours.
Eight advantages of investing in foreign exchange
(A) the investment object is the national economy, not the performance of listed companies.
(2) Foreign exchange is a bilateral transaction, which can be bought up or down, thus circumventing the restrictions.
(3) Margin trading has low investment cost.
(4) The transaction volume is large and it is not easy to be manipulated by large households.
(5) T+0 trading
(6) Being able to grasp the degree of loss (setting a stop loss) will not cause greater losses because there is no buyer or seller to bear it.
(seven) twenty-four hours trading, trading can be carried out at any time.
(8) High yield (shares are only distributed four times a year at most, and foreign exchange is the interest that investors can enjoy every day when they hold high-interest currency contracts.
Comparison of various investment channels
Profit mode of funds needed for investment projects, risk degree of funds, trading time, control degree of trading mode, flexibility of funds, and handling fee tax.
Bank 100% interest income inflation caused the principal to depreciate in disguise for 8 hours, and banks queued up at the counter to handle 20% slow interest tax.
The stock market 100% increase is a trap of artificial speculation when profits fall, with high risk (nine losses for ten investors), high market price control for four-hour one-way trading, and large policy intervention, generally 4% of the government's money.
A 50%- 100% increase in the real estate market is profit, otherwise it can only be regarded as difficult to assess the value preservation, and it is easy to find buyers for funds. Private or intermediary companies are involved in paying various taxes.
About 65,438+00% of two-way transactions in the futures market have four-hour two-way transactions such as quick return, medium risk, limited time and forced liquidation. The market price is moderately controlled, and some varieties are highly controlled. For example, mandatory positions depend on the variety and are higher.
When the foreign exchange firm 100% rises, it is difficult to make a profit when the profit falls, and it is easy for funds to get stuck in a 24-hour one-way transaction. You can set a limit order, and you can't control the slow price difference of more than $3 trillion per day.
1%-5% two-way trading in the international foreign exchange market, with fast speed and small return. I control 24-hour two-way trading. I can't control the daily turnover of more than $3 trillion, and the difference is small.
Part of the foreign exchange market
A. Central Bank
Responsible for issuing domestic currency, controlling money supply, holding and dispatching foreign exchange reserves, and maintaining the internal and external value of domestic currency. Under the floating exchange rate system, the central bank is often forced to buy or sell foreign exchange in the foreign exchange market to intervene in the foreign exchange market and maintain market order. For example, the seven major industrial organizations (G7) composed of the United States, Japan, Germany, Britain, France, Canada and Italy often hold summit meetings and reach agreements on the exchange rates of major currencies to limit the range of exchange rate fluctuations. Due to the frequent joint intervention of G7, the exchange rate is stable; Sometimes, the central bank will intervene in the open market for the purpose of adjusting monetary standards or policy needs. Intervention basically takes a different position from the market public, usually without special factors, and the central bank will not take the initiative to intervene. Under normal circumstances, the central bank's intervention in the foreign exchange market can only achieve temporary results, so that the exchange rate will not rise or fall too fast, but it cannot change the long-term basic trend.
B. Commercial banks
In any place, whether it is the main foreign exchange market or not, ordinary petty cash transactions and cheque cashing are almost monopolized by banks. The main business of the bank's foreign exchange department is to convert customers' assets and liabilities in commercial and financial transactions from one currency to another, which can be handled through spot transactions or forward transactions. Because many banks are engaged in foreign exchange trading, foreign exchange trading is becoming more and more popular.
C. foreign exchange brokers
Foreign exchange is the same as the stock market. In any active market, there are many brokers who play the role of (foreign exchange dealers) in the United States, just to collect commissions, negotiate exchange agreements for foreign exchange transactions for customers, win over buyers and sellers, and buy and sell directly or indirectly through the contact of foreign exchange brokers. Foreign exchange brokers and brokers themselves do not bear the profit and loss risks of foreign exchange transactions, and the price of their intermediary work is brokerage fees or commissions. Foreign exchange brokers are familiar with the supply and demand of foreign exchange in the market, the analysis of news and charts, exchange rate changes and trading procedures, so investors are willing to adopt them.
D. funds
This kind of institution is basically similar to a securities firm in nature, but the difference is that it often buys and sells on its own, and it can also bear the risk of profit and loss selectively according to its own wishes, while banks and securities firms are often its trading objects.
E. foreign exchange supply and demand sides
Foreign exchange supply and demand caused by trade, settlement of foreign exchange by importers and exporters after commodity export or import, and transportation, insurance, tourism, study abroad, buying and selling foreign bonds, securities, funds, interest payment, etc.
F. Foreign exchange investors
The so-called foreign exchange investors, in order to predict the rise and fall of the exchange rate, use spot, forward or forward trading channels to engage in large foreign exchange transactions with a small amount of margin. When the market is bullish, they buy first and then sell, and when they are bearish, they sell first and then make up for the write-off, earning the price difference in the middle with minimal fluctuations and making huge profits. Therefore, foreign exchange investors are often the main foreign exchange investors.
Foreign exchange and foreign exchange transactions
The foreign exchange market, also known as "Forex" or "FX" market, is the largest financial market in the world, with a daily trading volume of 1.9 trillion US dollars, which is 30 times that of the US stock market and 600 times that of China stock market.
"Foreign exchange trading" means buying one currency and selling another at the same time.
Each currency has an internationally unified symbol, such as:
Currency symbol currency symbol currency
Euro euro yen yen
GBP GBP NZD NZD
Dollar Australian dollar Australian dollar
Swiss franc Canadian dollar
Foreign exchange is traded in the form of currency pairs, such as Euro/USD or USD/JPY.
For beginners, it seems very difficult to understand a foreign exchange trading quotation. In fact, as long as you master two basic points, it will be very convenient to interpret quotations. The currency before 1 is the base currency. 2) The value of the base currency is always 1. For example: USD/JPY 120.5438+0. In this set of quotations, the US dollar is the base currency. USD/JPY/KOOC-0/20.0/KOOC-0/means USD/KOOC-0/equals JPY/KOOC-0/20.0/KOOC-0/. Whether you buy/sell, you are trading the base currency.
The concept of "point"
In the international foreign exchange market, the exchange rate price * * * has five digits, and the last digit of the exchange rate price is called a point, such as 0.01kloc-0/4.51USD and 0.0008+0 EUR-USD.
In foreign exchange transactions, you will see bilateral quotations, which consist of buying price and selling price. The difference between the bid price and the selling price is the spread, and traders profit from the spread.
24-hour global market
For foreign exchange investors, the best opportunity is always to trade the currencies with the largest transaction volume, that is, the "major currencies". Today, 85% of foreign exchange transactions are major currencies, including US dollar, Japanese yen, Euro, British pound, Swiss franc, Canadian dollar and Australian dollar.
The huge trading volume makes it impossible for any institution to manipulate this market, and the price moves regularly, which is fair to ordinary investors.
Compared with the huge trading volume, another remarkable feature of the foreign exchange market is that it is a 24-hour global market. Market trading starts from Sydney every day, and with the rotation of the earth, the business days of every financial center in the world will start in turn.
The 24-hour market enables foreign exchange traders to arrange trading time according to their living habits, and to cope with foreign exchange fluctuations caused by economic, social and political events in various periods in order to obtain trading opportunities.
Characteristics of foreign exchange market
With the continuous development of the foreign exchange market, more and more stock and futures investors transfer their funds to the foreign exchange market. The following points are the advantages of the foreign exchange market becoming a hot investment spot:
24-hour market
The foreign exchange market is open 24 hours a day, unlike the China stock market, which only trades at 9: 30 am ~1:30 am and13: 30 pm ~15: 30 pm. Therefore, the foreign exchange market is suitable for active traders. Investors can trade according to their own schedule. At the same time, the 24-hour uninterrupted feature ensures the smallest market gap; In other words, the possibility that the opening price is significantly higher or lower than the closing price is ruled out. In other words, because of the 24-hour market, it is impossible to open or close positions.
In the stock and futures markets, because all transactions are concentrated in the central exchange, the stock market has a fixed opening and closing time. At the close of the stock market, stock trading is very sparse or there is no trading at all, so trading after the close is basically impossible.
More importantly, the fixed closing time makes it impossible for traders to close their positions for a period of time, which further exposes traders to greater risks: if there is significant news unfavorable to traders after closing their positions, traders have no chance to close their positions and leave, thus reducing losses. Moreover, traders can only wait until the market opens the next day before they have a chance to close their positions, and the opening price may be completely different from the closing price of the previous trading day.
low cost
The cost of foreign exchange transactions is extremely low, with only a few points of bid-ask spread, which is equivalent to one thousandth of the handling fee. In addition, the pure electronic market allows traders to trade directly with "bookmakers", eliminating the cost of price tags and intermediaries, thus further reducing transaction costs. Because the foreign exchange market provides 24-hour liquidity, traders get a narrow and competitive spread, making online foreign exchange trading a paradise for short-term traders.
Simple and diverse transactions
Unlike the stock market, which needs to pay attention to thousands of stock types, the foreign exchange market only needs to pay attention to a few currency pairs, such as major currency pairs such as Euro/USD and USD/JPY, which account for 90% of the whole market.
The largest and fairest market
The daily average trading volume of the foreign exchange market is $65,438 +0.9 trillion, which is four times that of the futures market, 30 times that of the US stock market and 600 times that of China stock market, making it the largest and most liquid market in the world. The huge market capacity gives investors enough profit space.
Although there are many different kinds of currencies in the world, 85% of the daily trading volume is concentrated in the currencies of G-7 countries, commonly known as "major currencies". Compared with the futures market composed of hundreds of products, multi-exchange and stock market composed of more than 50 thousand stocks, the liquidity of foreign exchange market is obviously incomparable to that of stock and futures market. One of the great advantages of popularity is that few or no one can manipulate the foreign exchange market. This is the main reason why the foreign exchange market has become the fairest market in the world. In addition, the high liquidity of the market ensures the accurate execution of the transaction, and the market trend is very obvious, which is especially suitable for technical analysis.
Both bear market and bull market can be profitable.
Foreign exchange transactions always involve currency pairs. When you buy one currency, you must sell another currency. You can hold long positions or short positions, no matter what the market is, you have a chance to make a profit.
Leverage ratio, enlarge funds
Leverage ratio is one of the important factors to determine whether a market is worth investing, because traders can customize their risk exposure by using leverage. If an investor opens a standard account, the amount of the first order is100,000 USD. Without leverage, traders have to pay $65,438+000,000 to participate in trading, whether buying or selling. However, if the leverage ratio is 1000 times, traders only need to pay1000 USD for both buying and selling.
This leverage ratio is much higher than that in the stock and futures markets, enabling traders to maximize profits according to market fluctuations. At the same time, the leverage ratio also enables small investors to enter this market that originally belonged to large investment. Of course, we must realize that leverage ratio is a double-edged sword, which can make investors make quick profits, but it is also easy for you to make quick losses.
Market clarity
The transparency of the foreign exchange market is very high. A reputable broker will provide traders with real-time updated executable quotations. Although stocks and futures have been traded online, the price displayed on the online exchange is only the final trading price, not the executable price. Furthermore, online trading can ensure that all the prices of traders are fair. However, when trading stocks and futures, traders must first ask brokers for quotations, which gives brokers the opportunity to check traders' positions and manipulate prices on traders' positions.
Our online trading platform provides real-time portfolio and account tracking functions, thus improving the efficiency and transparency of the market. Traders can log on to the platform at any time to check the profit and loss of positions, and prepare to show positions, orders, margin positions and the latest total profit and loss figures in detail.
T+0 mode
It can be operated many times a day, which provides investors with great profit opportunities.
Online foreign exchange trading
Network technology brings transaction revolution.
Before the development of network technology, foreign exchange transactions have always been exclusive to financial institutions such as big banks, and individual investors have basically missed this market. However, since the late 1990s, the rapid development and popularization of the Internet has greatly lowered the investment threshold and cost, making it possible for individuals to participate in foreign exchange investment.
In the past, the transaction spread cost of bank 10-30 points was reduced to 3-4 points through our online platform.
Dow Jones News, Reuters Quotes, professional charting tools, etc. In the past, only financial institutions could afford it, but now you can use it for free as long as you open an account.
The transaction that had to be completed in the bank can now be completed in a few seconds by sitting at home and clicking the mouse.
With the help of our company's resources, training and simulation trading platform, we can get started quickly in a short time.
The rise of the foreign exchange market is inseparable from the standardization of the market.
From June, 5438 to February, 2000, the Clinton administration passed the Futures Modernization Act, requiring foreign exchange commission merchants in the United States to register with the American Futures Association (NFA) and accept the supervision of the Commodity and Futures Trading Commission (CFTC).
The introduction of the Futures Modernization Act has put online foreign exchange margin trading on the track of standardized development and provided strong legal protection for foreign exchange investors. This protection measure applies not only to American investors, but also to investors from all over the world.
The lowering of entry threshold, the strengthening of government supervision and the inherent charm of the foreign exchange market for individual investors have made the foreign exchange market a new favorite of individual investors in the 2 1 century.
Elements of foreign exchange trading
Understand the margin system and understand the margin.
Margin is a way to improve purchasing power by using leverage ratio. If you have $5,000 in cash in the margin account and allow a leverage ratio of 65,438+000: 65,438+0, you can buy foreign exchange with a maximum value of $500,000, because you only need to show the purchase price of 65,438+0% in your account as a guarantee, in other words, you have the purchasing power to buy $500,000.
Benefits of profit
Profits enable you to increase the return on investment with less cash investment. It should be noted that margin trading can not only expand your profits, but also expand your losses.
The following is an example to illustrate the benefits of margin trading:
In a margin account with a balance of $5,000, you decide to underestimate the exchange rate of the US dollar against the Swiss franc.
To achieve this strategy, you must buy dollars (and sell francs at the same time) and wait for the exchange rate to rise.
At present, the buying/selling exchange rate of USD/CHF is 1.6322/ 1.6327. (That is to say, you can buy 1 USD or sell 1 USD with1CHF.
Your feasible leverage ratio is 100: 1 or 1%. You execute this transaction, buy a bill, buy 100000 dollars, and sell 163270 Swiss francs.
Under the leverage of 100: 1, your initial deposit for this transaction was 1000 USD, and now your account balance is 4000 USD.
As you expected, USD/CHF rose to 1.6435/40. You can exchange 1 USD at the price of 1.6435 or buy 1 USD with 1.6640 Swiss francs. Since you are bullish on dollars (bearish on francs), you must sell dollars and buy back francs to make a profit.
You close your position and sell a single order (sell $ 100000 and change it to 164350 Swiss francs). Since you initially sold (paid) 163270 Swiss francs, your profit is 1080 Swiss francs.
To calculate your profit and loss in dollars, just divide 1080 by the current dollar/Swiss franc price 1.6435, and your profit here is $ 657. 13.
abstract
Initial investment: 1000 USD
Profit: $657.65438 +03
Return on investment: 65.7%
If you don't use leverage to execute this transaction, your return on investment will be less than 1%.
Is this ok?