The foreign exchange trading platform is the opponent faced by ordinary foreign exchange investors. In most cases, foreign exchange traders do not trade directly with other foreign investors, but with platform brokers on the platform. Knowing the essence of this platform, many problems will be simple and clear.
Based on the principle of financial leverage, foreign exchange investors first deposit a sum of money (mostly dollars) with foreign exchange counterparties, and then use this money to exchange for national currencies to earn the difference. This money is a foreign exchange deposit. Different from foreign currency deposits, foreign currency margin trading only delivers the difference of currency changes, rather than paying in full, and its leverage ratio ranges from 10 to 200 times.
Its advantage is that it can be traded for a long time to adapt to the changes in the international money market (mostly from Japanese opening to new york closing), so it can make a quick profit. Its disadvantage is that due to the operation mode of financial leverage, investors will face great trading risks if they are not familiar with its operation skills, and they will easily lose their money if they are not careful.
Extended data:
The first requirement of foreign exchange margin in the process of speculating foreign exchange is to choose the counterparty carefully, because the choice of counterparty directly affects the transaction cost and capital safety of investors.
Among the conditions that a good counterparty must have, the first one is the safety of funds, and it is necessary to have a formal and rigorous financial institution to supervise the deposit of funds in order to be qualified. The second condition is the transaction cost. The quotation difference is less than 6: 00, the middleman fee is less than plus or minus 5: 00, and the total transaction cost is less than 16: 00, so it is a more suitable counterparty.
A good counterparty must quote quickly. Many brokers or banks will take advantage of investors in the quotation for their own profits, that is, risk considerations. Our quotation difference may be only five points, but when quoting, they deviate from the disk quotation and increase the difference in disguise. Others even slow down the quotation when the market fluctuates violently, reducing the chances for investors to increase profits or reduce losses. Smaller banks or brokers are more prone to this situation. Therefore, if you want to invest in foreign exchange margin, you should first choose a large counterparty with good reputation and long history to increase the chances of investors making profits.
Another way of foreign exchange financing is foreign currency deposit, which converts local currency into foreign currency deposit with 1: 1 Investors choose the deposit currency according to the fluctuation trend of national currencies and interest rate changes. If investors are familiar with the long-wave changes of exchange rates and interest rates in various countries in the international market, foreign currency deposits can be regarded as a low-risk investment method. However, foreign currency deposits should be coordinated with bank business hours, and the global foreign exchange trading market changes 24 hours a day, so investors will suffer a little in this respect.
References:
Baidu encyclopedia-foreign exchange trading