Money is not everything, without money you can do nothing!
There is no greater joy for an investor than a rising account balance, and no greater misery than losing money after a tough year.
Any investment that doesn’t talk about money is going rogue, so today we’re going to talk about money.
In the relevant costs (costs), especially before the introduction of foreign exchange small white, pay more attention to the cost of foreign exchange investment, worry about whether they have enough money to invest in foreign exchange, do foreign exchange investment have what costs?
We participate through the broker platform.
We need to post a certain margin as collateral according to the requirements of the broker platform and the leverage ratio of your choice.
Similar to car sharing and Taobao store opening, the deposit is used as a credit guarantee and is not a cost.
There are three main costs of trading: overnight interest and fees.
Point spread is a major cost component for traders because most brokerage platforms make their money from point spread.
The so-called point difference is also the difference, for traders, generally higher, the greater the point difference, the more profit brokers.
The size of the spread is not decided by the broker, and is related to the liquidity of the pair. Different currency pairs, different trading time, the spread is different.
Overnight interest accrues if your forex trading orders are not closed on the same day.
To be precise, overnight interest is not exactly a cost. It can also be a benefit, depending on the relative size of the currency you hold. When you buy the currency at a higher rate than you sell it, you get a spread.
Otherwise, the interest rate spread is paid.
Traders, for example, have to pay interest in dollars and charge interest in euros.
If the euro is 4.8% and the dollar is 5%, the trader will pay 5% on the dollar and 4.8% on the euro, for a total overnight rate of 0.2%.
The fee broker platform has two profit models, one is through the spread profit, the other is through the commission (fee) profit.
Different broker platform income fee is also different, but we generally do not recommend small white to choose this platform.
In general, compared with other investment products, the cost of foreign exchange is relatively low.
How to make money (income) So, let’s talk about how to make money through it.
There’s a saying in the investment world that most investors lose money, which shows that making money isn’t as easy as you might think.
Forex betting is to make money by taking advantage of the difference between exchange rates. For example, when EUR/USD is 1.1112 and you buy (sell) 10,000 euros, you have 10,000 euros (-10,000 euros) and -11,112 dollars (11,112 dollars) in your account.
After half an hour, EUR/USD becomes 1.1212, at which point you decide to close out your position and sell (buy) 10,000 euros, at which point you have 0 euros and 11,212 dollars (-11,212 dollars) in your account;
You make (lose) $100.
It seems simple enough.
As long as you can accurately predict the direction of the exchange rate, you can make money.
But the reality is that FX volatility is influenced by many factors, such as financial policies and economic data releases.
In addition, with trading volume of nearly $6 trillion a day, liquidity is extremely high.
Exchange rates change in milliseconds.
You may end up with less money in the blink of an eye as you decide whether or not to liquidate your position.
Know THE PRICE LIST and the PRICE QUOTE, which is THE PRICE comparison of the two currencies.
As we know, the object of foreign exchange transaction is currency pair. In currency pair, the former currency is the benchmark currency and the other currency is the valuation currency. Taking the currencies of different countries as the standard, the foreign exchange price has three types: direct price, indirect price and dollar price.
Direct pricing is based on foreign currency, that is, how much domestic currency is needed to buy a unit of foreign currency;
Indirect pricing is based on domestic currency. How much foreign currency is needed to buy one unit of domestic currency?
The dollar price is based on how many other currencies it takes to buy a unit of dollars.
In actual transactions, the price in the foreign exchange market is generally two-way price, such as EUR/USD 1.1156/1.1119.
Which brings us to the next point.
The quotation is the Bid Rate and Offer Rate given by the foreign exchange quotation (institution or bank). The inquiry is the relative Offer price and Offer price for the foreign exchange trader.
For example, in the K chart below, EUR/USD 1.1118/1.1120 represents the quotation given by the institution. In other words, the institution is willing to buy euros at 1.1118 and sell euros at 1.1120.
Correspondingly, traders can buy euros at 1.1120 and sellers sell euros at 1.1118.
Powerful investors should be well aware.
What does that mean?
When will he liquidate his position and how much will he make?
He had done the calculations.
How did he calculate it?
For the calculation of foreign exchange profit and loss, the calculation method is different for the dollar and the denomination currency.
The formula is as follows: 1. USD is a combination of pricing currencies, such as EUR/USD, GBP/USD and AUD/USD Gain/loss =(bid-bid price)x contract unit X contract quantity, point value = contract unit X0.0001 Example: Euro /USD per lot:
100,000EUR bought 10 lots of euros in a day and then sold 10 lots of euros, the closing bid price of the day: 1.1120;
Calculation method of profit and loss:
(1.1130 — 1.1120)¡Á100,000¡Á10(hand)=1000 USD (profit)2. USD is a combination of benchmark currencies, such as USD/JPY,
USD/CHF and USD/CAD Gain/Loss =(bid-bid price)/ bid price X contract unit X contract quantity point value = contract unit X0.0001 / bid price, (USD/JPY point value = contract unit X0.01 / bid price) Example: USD/ per lot:
$100,000 sold 3 lots of USD/JPY and then bought 3 lots of USD/JPY in one day, i.e., closing offer price of the day: 10940;
Purchase price: 10920 Calculation method of profit and loss:
(10940 — 10920)¡Á 100,000/10920 ¡Á3=549 USD(profit)3. Cross-currency portfolios, such as EUR/GBP, EUR/CHF and EUR/JPY,
GBP/JPY Gain/Loss =(bid-bid price)x contract units X number of contracts x target currency against the dollar EUR/JPY or GBP/JPY point value = contract unit X0.01 / bid price EUR/CHF point value = contract unit X0.0001 /USDCHF bid price EUR/GBP point value = contract unit X0
.0001x offer price example: EUR/JPY per lot: 100,000 EUR/JPY sell 3 lots of EUR/JPY in one day and then buy 3 lots of EUR/JPY in one day, i.e. close out the position, JPY/USD =0.0091 ask price: 12148;
Profit and Loss Method: (12148 — 12152)¡Á100000¡Á3¡Á0.0091=-10920 USD(loss)5 What are the traits and habits of moneymakers Finally, we all know that the fastest way to make progress in an unfamiliar field is to imitate the winners.
Therefore, understanding the characteristics of people who make money from forex investing, imitating and moving in the right direction from the start, will greatly improve your probability of making money Investing in Forex potential traits ¢Ù Don’t always focus on how much money you can make, think more about how much risk you can take.
¢Ú The novice should not rush to use high leverage and invest $1,000 in the time war to survive in the market first.
¢Û Build good technology and then increase the principal.
¢Ü Not greedy for a variety of skills, half a year specialized in a basic trading technique, in order to understand the world of foreign exchange, and harvest, to find their own method.
¢Ý After finding the operation mode you are good at, don’t forget to thoroughly examine this method, repeatedly examine and reflect, and establish an objective record.
¢Þ If I’m wrong, I need to get out and be in awe of the foreign exchange market.
¢ß Let market movements tell me the direction of market movements.
Choose and wait for a foolproof opportunity to attack, otherwise I will have to give up.
¢à self-restraint ability, holding parts is not good for me, I will appear, to my advantage, I will hold long.
¢á In case of loss, keep it steady. When the operation is not in good luck, we will continuously reduce the amount of operation or even stop operation.
¢â Keep revisiting and taking notes.
In investing, we should take everything to do with money seriously, so this article must be fully understood.
Hope you can all make money through foreign exchange investment!
Investors still focus on Omicron, two factors may guide the market theme.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
