In the past decade, foreign exchange transactions have not only multiplied in number, but also undergone significant changes in substance.
Nowadays, foreign exchange has become the most important financial commodity in the world.
Specifically, foreign exchange trading mainly includes 6 trading methods, which will be introduced in detail below.
1. Foreign Exchange Margin trading is essentially a spot trading of foreign exchange contract. The main difference between margin trading and spot trading of foreign exchange contract is that the amount of currency agreed in the contract is different.
The amount of currency agreed upon in a standard forex online margin trading contract is US $100,000 against Japanese yen, Swiss Franc and Canadian dollar, and 100,000 pounds and 100,000 euros for other currencies.
Online margin trading in foreign exchange also involves a “mini” contract in which the agreed amount of currency is $10,000 against the Japanese yen, Swiss franc and Canadian dollar, and ¡ê10,000 and 10,000 in other currencies.
The growth of online margin trading has broken down geographical constraints, making it easier for individuals and small institutional investors who previously had to rely on local brokers to participate in forex trading.
2. Solid Foreign Exchange Transaction Personal solid foreign exchange transaction refers to the transaction by an individual to exchange one kind of foreign currency into another kind of foreign currency by entrusting a bank with reference to the real time exchange rate in the international foreign exchange market.
Since investors must hold enough foreign currencies to be sold before trading, real foreign exchange trading lacks short selling mechanism and financing leverage mechanism compared with the international popular foreign exchange margin trading.
At present, the main banks in China have launched individual foreign exchange trading business.
With the foreign exchange in hand, Chinese investors can open an account at a bank and deposit funds, which can be bought and sold through the Internet, telephone or over the counter.
3. Spot Foreign Exchange transaction, also known as spot transaction or spot transaction, refers to a transaction behavior in which both parties handle delivery procedures within the same day or two trading days after the transaction of foreign exchange.
The current foreign exchange transaction is the most commonly used transaction method in the foreign exchange market, accounting for the majority of the total foreign exchange transaction.
This is mainly because the current foreign exchange transaction can not only meet the temporary payment needs of the buyers, but also help the buyers and sellers to adjust the currency ratio of the foreign exchange position to avoid the occurrence of foreign exchange rate risks.
4. Forward Foreign exchange transaction The forward foreign exchange transaction is different from the current foreign exchange transaction. It refers to the foreign exchange transaction in which the market transaction subject trades on the specified date (generally 3 business days after the transaction date) in accordance with the forward contract.
Forward exchange trading is an essential part of an efficient foreign exchange market.
In the early 1970s, the international exchange rate system changed from the fixed exchange rate to the floating exchange rate. The exchange rate fluctuations intensified and the financial market developed vigorously, which promoted the development of the forward foreign exchange market.
5. Foreign Exchange Futures Trading With the development of the futures trading market, currency (foreign exchange), which used to be the medium of commodity trading, has also become the object of futures trading.
Forex futures trading is a trading activity in which buyers and sellers of foreign exchange buy or sell a standard amount of a specific currency at a future date at a price determined by an open outcry (similar to an auction) on an organized exchange.
The futures market should include at least two parts: the trading market and the clearing center. After the buyer or seller of the futures trades on the exchange, the clearing center becomes the counterparty until the actual delivery of the futures contract.
6. Foreign Exchange Options Trading Foreign Exchange options are often viewed as an effective hedge because they eliminate the risk of depreciation to preserve potential gains.
The delivery of forward foreign exchange transactions can be made on a specific date (e.g., May 1) or within a specific period (e.g., May 1 to May 31).
However, both parties are obligated to deliver in full.
A forex option is when one party to the transaction (the holder of the option) owns the rights to the contract and can decide whether or not to execute the contract.
The buyer of the contract can let the option expire without delivery if he chooses, and the seller has no right to decide whether the contract will be delivered.
Ii. What are the ways to make profits from foreign exchange trading?
First: Make a small profit with a small stop loss (so-called scalp).
Second: to chase breakthrough and follow the trend to earn profits.
Third: to short or medium line to turn a larger profit.
Fourth: to big warehouse small do big profits.
What to do to win the market:
