Home What are the basic knowledge of speculation in foreign exchange

# What are the basic knowledge of speculation in foreign exchange

What are the basic knowledge of speculation forexrebateclub foreign exchange: several major currencies in Engl forex rebate clubh symbols of the United States dollar (USD) euro (EUR) yen (JPY) pound Swiss franc (CHF) Canadian dollar (CAD) Australian dollar (AUD) New Zealand dollar exchange rate change the smallest unit - point (PIP), point spread exchange rate Generally expressed in 5 digits, the last digit change of 1, for the smallest exchange rate change, called 1 point buy cashbackforexbroker and sell price difference between called the spread speculation gold how to make money experts free guidance bank gold and silver TD opening guide bank gold and silver simulation trading software set gold number desktop line price tool margin trading minimum unit if the standard cashbackforexexness, the general network of brokers to provide the transaction unit is 1 lot (lot) of turnover is 100,000 base currency If it is a mini-account, the transaction of a lot is the standard account, such as the transaction of a lot of USD/JPY actual transaction is equivalent to the actual buy (sell) 100,000 U.S. dollars / yen If it is a lot of EUR/USD, the actual volume of turnover is equivalent to 100,000 euros worth of EUR / USD Trading contract international common use K as 1000 U.S. dollars Thousands of U.S. dollars to indicate the total amount of funds traded contracts, such as 100K contract account, is 100 thousand U.S. dollars, both 100,000 100,000 U.S. dollars account, this 100K account, also known as the standard account. There is also a 10K contract account, that is, 10 thousand U.S. dollars, both 10,000 10,000 U.S. dollars account, this 10K account, also known as the MINI account Another kind of account called professional account is 250K, that is, the amount of funds for 250,000 U.S. dollars Some companies have also set up some intermediate accounts, such as 50K account that means that he is between the standard and you account to pay 300 U.S. dollars in margin, and your account is still 1700 U.S. dollars, then according to the Hong Kong SFC trading standards, when the funds in your account is less than 3%, that is, when you lose 1400 points of spread before the recovery to call the margin notice, and you have to lose 1600 points of spread, you cashback forex burst 1600 points, in the foreign exchange market is a big gap plus the margin trading method flexible The transaction commission method and risk tracking single protection, the most embarrassing situation is almost impossible However, if the standard account, the risk should be increased because the standard account margin in the profit and loss margin, is 10 times the MINI account In other words, if you open a single amount of money and the greater the proportion of your total funds, the safer you are some friends with 2000 U.S. dollars to open 100 times the standard account. So, so to speak, margin trading is not a hedge, you must learn to stop loss must force themselves to pay attention to risk prevention many friends who have done margin trading, when they look back at the stock, have a very deep sense they will have a deeper understanding of the trend, the risk of some friends may not believe, then you You can find a demo trading software and do a serious margin trading demo for 2 weeks, then you will have some insight Buy means sell Every time you buy a base currency, you sell a secondary currency. To explain this equivalence, we can convert the GBP/USD rate and switch the buyers bid and sellers ask accordingly to arrive at the USD/GBP rate Buyers bid; (1/1.5545) Sellers ask This means that the buyers bid for 1USD is 0.6431GBP (or 64.31 pips) and the sellers ask for 1USD is 0.6433GBP (or 64.33 pips) Please note that at this point the USD becomes the base currency and the difference is 2 pips Trading unit As mentioned above, each time a foreign exchange transaction is exchanged for one currency for another, the basic trading unit for margin FX investors is called a lot, which consists of 100,000 units of base currency (but some brokers can arrange to trade in mini-lots, with $10,000 as the base unit of the transaction) to buy a lot. Similarly, selling a lot of GBP/USD means selling 100,000 pounds at the price of 1.5847 pounds to 1.5847 U.S. dollars, for a total of 158,470 U.S. dollars. /The investor does not need to put up the full value of the transaction, as mentioned in the previous example (158,520USD). The buyer only needs to open a margin account to reach the size of the transaction because selling one currency means buying another currency at the same time. The margin requirement is usually 1%-5% of the potential value of the trade. If you trade through a US broker, you may have to open a USD margin account, even if you are a UK resident. Assuming your margin account is$5,000 and the margin requirement is 2.5%, you can open a position worth $200,000. If the money in your margin account is below the minimum required to support your open position, you may be asked to add money to the account. When you buy a currency, you are going long on that currency. A long position is opened at the sellers asking price so that if you buy a single GBP/USD at an offer of 1.5847/52, you will buy 100,000 GBP at 1.5852 USD per GBP. A short position is established at the buyers bid, in our case 1 GBP/USD 1.5847. Because of the symmetry of currency trading, you are long one currency and short the other, for example, you are short GBP and long USD when you exchange GBP 100,000 for USD. To close a position means to make a reciprocal trade in the same currency pair For example, if you are already long a single GBP/USD at the sellers asking price, to close the position you would be short a single GBP/USD at the buyers bid. When the ratio of total funds left in the account to the funds required to open a position is less than a certain ratio (as stated in the contract), the broker will issue a margin call to the client and ask the client to deposit a certain amount of funds within a certain period of time, otherwise the open position in the clients account will be forcibly closed. Note: For various reasons, it seems that online brokers rarely issue margincall nowadays, but generally they will execute it immediately after reaching the level of mandatory position closing PoweredbyRunman.cn Margin maintenance rate, minimum margin maintenance rate, mandatory position closing (commonly known as a storm position) All of the account The ratio of all the funds in the account to the amount of margin required to open a position is called the margin maintenance rate Example: the total funds in the account is 10,000USD, the margin required to open a position is 1,000, the margin maintenance rate is 10,000/1,000*100%=1, the total funds in the account is 2,000, the margin required to open a position is 1,000, the margin maintenance rate is 2,000/1, If the margin maintenance rate of the account falls below this level, the broker will force the clients account to close the position and the remaining margin will remain with the client. Relative to the current price, for the direction of the operation is unfavorable) set an order, after arriving, automatically execute the order among the buy or sell Example: relative to the buy (BUY), stop-loss orders specified in the price to be higher than the current price (this price above the current price, relative to the current price to buy, is unfavorable) when the exchange rate rises to this level, the system will automatically execute the order to buy the specified currency If the exchange rate rises to 1.2175, the system will automatically execute an order to buy the specified currency pair. In contrast to a sell (SELL), the price specified in the stop loss order should be lower than the current price (this lower price is unfavorable in relation to the current sell price). Sell the specified currency pair when the exchange rate is 1.2120, set a stop-loss sell order at 1.2080, if the exchange rate falls to 1.2080, the system will automatically sell the specified currency pair LIMITORDER: at a certain price level (this price level relative to the current price, for the direction of the operation is favorable) set an order, after the arrival, automatically execute the order When the buy or sell example: relative to the buy (BUY), the price specified in the limit order to be lower than the current price (this price below the current price, relative to the current price to buy, is favorable) when the exchange rate falls to this level, the system will automatically execute the order to buy the specified currency pair when the exchange rate is 1.2120, set the limit buy order at 1.2080, if the exchange rate falls to 1.2080, the system will automatically buy the specified currency pair Relative to the sell (SELL), the price specified in the limit order to be higher than the current price (this price above the current price, relative to the current price to sell, is favorable) When the exchange rate rises to this level, the system will automatically execute the order to sell the specified currency pair when the exchange rate is 1.2120, set the limit sell order at 1.2175. If the exchange rate rises to 1.2175, the system will automatically sell the specified currency pair Market order (MARKETORDER): instruct the broker to buy or sell the specified currency pair according to the prevailing market price at the time of the price of 1.2120, issue a market order to buy (sell), the broker will be the fastest speed according to the prevailing market price transaction instructions (ONECANCELOTHER) This means that the order is valid until it is cancelled. Foreign exchange order method MarketOrder: refers to the current foreign exchange market in accordance with the real-time quotation transaction EntryOrders: is predetermined by the trader a specific price, when the market reaches this price, the EntryOrders will only be completed. EntryOrders are executed automatically by the traders trading system, unless the trader cancels before the price is reached StopEntryOrders: If you think that the market will continue in that direction when the exchange rate breaks through a specific price, you can do this kind of order, when the exchange rate breaks through a specific price. StopEntryOrders will only be traded This action is to do a stop-loss action on the original position, and then at the same time open and the original position trading in the opposite direction of the operation of the order Limit orders: you think the market touches a particular price, the exchange rate will rebound in the opposite direction of the original market trend, you can advance this order, when the exchange rate touches (rather than break) a particular Stop-Loss Orders: Stop-Loss Orders must be linked to another open position, the purpose is to prevent the open foreign exchange position from suffering greater losses, and at a particular price to close a linked buy position Stop-LossOrders must be a sell order unless Stop-LossOrders will remain in effect unless the investor closes the position himself or cancels the Stop-LossOrders Stop-Win OrdersLimitOrders: linked to an open position, the purpose of which is to lock in the minimum profit of the open foreign exchange position, while at a given price to close a position linked to a buy position part of the Stop-LossOrders LimitOrders must be a sell order unless the investor closes his own position or cancel LimitOrders, otherwise LimitOrders will remain in effect until the deal is made when the order is placed, while placing a stop-loss order, once a certain profit, immediately under the stop-win order, so that you can limit the risk, lock in profits and as profits rise, you can then place a new stop-win order Cascade to maximize profits Position extension overnight and swap interest spot foreign exchange trading, positions must be delivered after two trading days If a trader sells 100,000 euros on Tuesday, the investor must be delivered on Thursday, unless the position in euros is extended overnight for? As a premium service to our clients, at 6:00 a.m. CST, all open positions are automatically extended overnight so that the original foreign exchange position can be transferred to the next trading day before expiration The underlying position usually does not keep the same interest rate swap points, which are based on the underlying currency pair, the difference in swap interest between the two currencies and are accompanied by daily price movements For example, on a given day, the swap points per lot for USDJPY may be$0.50 while the swap points per lot for GBPJPY may be \$2.0. At 6:00 a.m. CST, the swap interest on the open position will be added to or subtracted from the account funds due to the automatic extension. The SWAP of open positions will be added to the capital of the account and conversely, the relevant SWAP will be deducted from the funds Special Note: On Thursdays, the SWAP will be added or subtracted three times as much as on weekdays, because the delivery actually takes place on Monday, two days after the weekend Leverage is generally offered by brokers with leverage ranging from 10 to 100 times. The margin requirement for 100x leverage is 1%. And so on. Leverage (MARGIN), which refers to the ratio of your overdrawn funds to the minimum margin required for you to trade a single From the current international prevailing ratio, from 10 times to 500 times are available