Foreign exchange trading is currently one of the most popular investment and financial management methods in the world. Due to the characteristics of many participants and huge transaction amounts, the investment target is the economy of a certain country, unlike stocks, which are listed companies. Therefore, the international market cannot be maliciously manipulated by some individuals, banks, foreign exchange dealers, funds, foreign exchange suppliers and demanders, or even a certain country.
The method of conducting foreign exchange trading is as follows (Foreign exchange trading is a very repetitive process, which is not very popular in China at present. For beginners, it is 10 times more difficult than stock trading, so it is recommended to learn more about foreign exchange. Knowledge and terminology, conduct more simulated transactions, and then conduct real account transactions after studying for a few years):
Step 1. Understand the basic knowledge of the foreign exchange market
The foreign exchange market is an international For basic knowledge about the investment market, please refer to Baidu Encyclopedia "Foreign Exchange Market". Through the study of basic knowledge, understand the currency pairs USD/JPY, GBP/JPY, spreads and margins in the foreign exchange market.
In addition, you should also understand the factors affecting the foreign exchange market, such as economic data, policy changes, etc. in various countries.
Step 2: Familiarize yourself with the application of foreign exchange trading software. Foreign exchange transactions generally use the MT4 platform for transactions. You can view the foreign exchange market and place orders through the platform. Since the K-line performance method of the foreign exchange trading platform is different from that of domestic stock and futures software, you can refer to relevant experience to set it to a familiar domestic performance method.
Benefits of MT4
HY Trader PC version
HY Trader client terminal is a pre-trading interface. It provides clients with technical analysis, chart analysis and intelligent trading to develop personal trading strategies.
MetaTrader 4 mobile version
MetaTrader 4 mobile trading platform now supports iPhone, iPad, Android and Windows operating system mobile phones.
Step 3. Understand the trading system. Because the leverage of foreign exchange trading is very high, it is also a market in which risk and return are directly proportional. In order to survive in the foreign exchange trading market, most people still have to establish their own trading system. Trading system is a relatively common term in current trading of stocks, futures, foreign exchange, etc. There is currently no generally accepted standard definition for it. Its core meaning can be understood as a standardized transaction with a systematic trading idea. It usually includes opening rules, stop loss/take profit rules, fund management rules, etc.
Step 4: Open a simulated account for trading
After the trading system is initially established, there is also a verification process. Usually, you can take the form of simulated trading and trade according to the trading system for a period of time. Verify whether the trading system can survive in the market or even make a profit. At present, basically every trader's platform can register a demo account for trading. The simulation usually lasts for three months and the capital curve is stable, and some funds can be entered into the market for trading.
Step 5. Enter the market for formal trading (open a real account for trading)
Usually, after individuals enter the foreign exchange market, most people will fall into setting up a trading system and discover the transaction after conducting the transaction. The system cannot make stable profits.
It is recommended to cycle between steps three and four multiple times. Do not rush for quick success or blindly operate without establishing a trading system, resulting in loss of money.
Benefits of foreign exchange trading
1. The investment target is the national economy
The investment target of foreign exchange is the economy of a certain country, unlike stocks, which is a listed company. Therefore, The international market cannot be manipulated by some individuals, banks, foreign exchange dealers, funds, foreign exchange suppliers and demanders, or even a certain country.
2. Foreign exchange is a bilateral transaction
Traders can either buy a currency pair contract as the beginning of a transaction, or sell a currency pair as the beginning of a transaction. In the same way, they can also buy Buying or selling a currency pair ends the transaction. It is possible to achieve profits regardless of the ups and downs.
3. Light investment cost
The amount of foreign exchange margin can be expanded to dozens of times, so the principle of financial leverage can be fully utilized to achieve a small gain.
4. Large trading volume
Forex is considered the most active and liquid financial product in the world. The daily global foreign exchange trading volume is estimated to exceed 1.2 trillion U.S. dollars. Such a huge flow makes exchange rate changes not controlled by anyone and more regular.
5. Able to grasp the magnitude of losses
You can set your own stop-loss limit in foreign exchange transactions, and will not incur greater losses because there are no buyers or sellers to take over
6. Twenty-four-hour trading
As the earth rotates and the market shifts, trading hours continue. From the opening of the Sydney market on Monday morning to the closing of the U.S. market on Friday night, a 24-hour trading cycle is created. A market that operates continuously hour after hour. One of the biggest advantages of trading Forex is the opportunity to trade 24 hours a day. This allows traders to respond to market changes at any time and take advantage of profitable changes.
7. High interest rate of return
Stocks only pay dividends up to four times a year, while in foreign exchange, if investors hold high-interest currency contracts, they can enjoy interest every day< /p>
8. There is a lot of data for trend analysis
The foreign exchange market often follows repeated fluctuation trends.
Currency markets exhibit specific regularities, creating price trends for market participants to follow. These price trends increase the chances of making a profitable trade.
9. Place orders at the consultation price without getting stuck
Foreign exchange margin trading is conducted over the phone or online. Therefore, within the past 24 hours, investors can do whatever they want. If you choose to enter the market, there will be no risk of being stuck due to being unable to enter the market, but there will be a financial risk of controlling investors.
10. Flexible allocation of funds and high liquidity
In a period of nearly 24 hours, investors buy and sell based on exchange rate fluctuations, and there is no time to enter or exit the market. There are no restrictions, and funds can be remitted into or out of the market at any time due to personal fund transfers, which is highly liquid and flexible.
Disadvantages of foreign exchange trading
Foreign exchange uses foreign exchange margin trading. The disadvantage is that it is easy to lose money, lose money quickly and lose a lot. You can make 10,000 yuan in half a day, and you can also lose 10,000 yuan in half a day. In short, risk is always proportional to return.
If you want to make money from the futures market, such as the foreign exchange market, you must first have sufficient and solid financial knowledge, coupled with skillful trading techniques, before you can make money from it.
Foreign exchange margin trading adopts the principle of leverage. Traders can take advantage of the characteristics of capital amplification and quickly accumulate their wealth through correct trading methods. This wealth amplification trading method is being accepted by more and more foreign exchange investors.