Forex School

The first lesson

What is Forex trading?

Forex is a currency with another currency exchange. Forex is the world's largest transaction, daily turnover of more than 15000 million u.s. dollars. Different from other financial markets, the foreign exchange market has no specific location and no central Exchange, but through the electronic network of banks, corporations and individuals trading. Due to the lack of specific exchanges, therefore the foreign exchange market to 24 -hour operation. Bargain during the transaction and make a counter-offer, passing through various information companies, investors learned that Forex market in real time.

What is Forex?

All kinds of investment projects, the most equitable and the most attractive people can be considered a foreign exchange margin trading. Foreign Exchange margin trading is that investors in banks or brokers provide trust for foreign exchange transactions. Bank or broker can provide 90% more than trust, in other words investors in possession of 10% resources in the region ( deposit ) can conduct foreign exchange transactions. Fxsol margin is the minimum requirement 1%, investors can at minimum 100 $ of margin for top 10000 dollars in foreign-exchange trading, is a small fortune!

How to make a profit?

Climate of monetary value in response to Forex trading and keep high and low volatility, such as yen, the day's volatility is probably 0.7% To 1.5% 。 Investors can buy low, sell high profit; also available from high prices to sell ( drop / short ), profit dips, because foreign exchange margin trading in advance and advance features allowing investments. And foreign exchange margin trading and closing date is not specified, transactions can be completed in a Flash, full-time 24 -hour access to markets can also at any time change your investment strategy is the most flexible and reliable investment.

Specific circumstances of foreign exchange margin

Exchange rates are displayed in the international market, the exchange rate is to display five numbers, such as:

Euro EUR 0.9003

Yen JPY 111.80

The Australian dollar AUD 0.5280

A minimum change in the exchange rate for the last number ( A little ) That is:

Euro 0.0001

Yen JPY 0.01

The Australian dollar AUD 0.0001

Currency exchange rate of high and low, does not automatically equal monetary value. Classification of exchange rate and currency:

Direct monetary ─ Euro EUR , Pound GPD , Australian dollars AUD , New Zealand NZD?

The indirect ─ Japanese Yen JPY111.80 , Swiss franc CHF , Canada CAD?

Direct currency exchange rates are 1 Direct currency exchange us $ Australian dollar AUD 0.5280 , That is, one Australian dollar 0.5280 Dollars. Euro EUR 0.9003, namely euro 0.9003 US dollars.

The indirect 1 Canadian dollar how much indirect if Yen JPY111.80 , That is, 1 The dollar 111.80 Yen. The Swiss franc CHF1.6006, that is, 1 US dollar 1.6006 Swiss francs.

Quotes

Foreign exchange margin to purchase price (Dealing Rate) Trading by banks or brokers on their own at the same time buy and sell prices, customers decide on the sale. Fxsol EURUSD, for example, buying and selling price ( price ) difference of 3 points. Smaller the difference for investors, cost less and also more profitable.

Contract unit

Trading foreign exchange on margin contract unit, similar to the stock exchange as a unit is based on a number of ( Hand / mouth ) For the transaction. Fxsol to 100,000 yuan for one hand, transactions and calculations to break even.

Calculating profit and loss

Calculating profit and loss is to calculate the value of buy and sell spread, such as buying the euro is 0.8946 When you sell 0.8956 , Spreads are 10 Points. To calculate the value of each point, you can direct and indirect currency respectively. Directly the characteristic lies in how the exchange rate of the currency fluctuations will not affect the value of each point. 100,000 EUR euro, exchange rate fluctuations each point value is 10 dollars. Procedures are as follows:

Changes in minimum units/exchange * contracts * out = the value of each point 0.0001 / 0.8942 〉* 100,000 * 1 = 11.183 EUR

We put 11.183 EUR * Exchange rate 0.8942 Each point is equal to the value of 10 Dollars. If the euro currency rose to 0.9000 every bit of the value and how?

〈 0.0001 / 0.9000 〉* 100,000 * 1 = 11.11EUR

Introduction to Forex trading   Forex trading tutorials , personal learning special

We put 11.183EUR * Exchange rate 0.9000 Know is equal to 10 Dollars. To sum up, only 100,000 yuan, all direct currency every bit of the value is 10 dollars.

Indirect monetary value of each point will change in response to exchange rate fluctuations. Program to direct money to meet different lies in the contract unit is based on the dollar. Yen JPY130.46 as an example calculation procedures are as follows:

Changes in minimum units/exchange rates, * contract * number of lots = every bit of the value of the dollar 0.01 / 130.46 〉* 100,000 * 1 = 7.7 USD

If the Yen exchange rate rose to 132.60 And every bit of the price will be 7.7 US dollars?

〈 0.01 / 132.60 〉* 100,000 * 1 = 7.54 USD

The answer is no, the yen and all indirect currency every bit of the price will change due to exchange rate fluctuations.

In addition, some banks or brokers, calculation of indirect currency of contract unit may not be in United States dollars. Such as the yen to 12,500,000 yen.

fxsol Trading system, customer holding surplus-deficit status for each lot of currency is displayed in real time with the market changes, customers do not need to calculate profit and loss on their own, details can participate in a demo account available.

Symbol

In the foreign exchange market, the representatives of each currency has its own symbols:

Currency  Dollar  yen,  pound  the euro  Swiss franc  Canadian dollar  The Australian dollar  New Zealand

Symbol USD JPY GBP EUR CHF CAD AUD NZD

When we understand the symbol, be able to identify the concept of foreign exchange margin trading. Operation there are two kinds of existing foreign exchange margin trading, phone trading and online transactions. Fxsol has two operations, to understand the operation of foreign exchange margin trading, the best way is to participate in a demo account.

Summary of advantages of Forex

1 . Low investment costs, less than the actual investment 10%!

2 . Two-way trade investment, change the profit opportunity!

3 . High profits, profits of more than 1 time a day!

4 . Risks can be controlled, can pre-set limit orders and stop loss points!

5 . Flexible funds, withdrawing money at any time!

6 . Global 24 -hour trading, choose the opportunity to profit!

7 . Low fees, less than 1 per thousand!

8 . Worldwide volume exceed one trillion dollars, is not vulnerable to manipulation!

9 . High transparency, all quotes, data and information are open!

10 . Transactions, in most cases foreign exchange real-time deal!

Lesson two  Foreign exchange and foreign exchange market

1 And foreign exchange

Foreign exchange, foreign currency, or in foreign currency for international settlement payment. 1996 year promulgated by article III of the foreign exchange control regulations provides specific content to the Exchange as follows: Foreign Exchange means:① a foreign currency. 包

Including bank notes and coins. II payment documents in foreign currency. Including bills, bank payment voucher, postal savings vouchers. ③ securities denominated in it. Including government bonds, corporate bonds, shares, etc. II special drawing rights and European currency units. ⑤ other foreign currency-denominated assets.

2 , Exchange rates and price

Exchange rate, also known as the exchange rate, refers to a country's currency to another country's currency prices, or is the parity between the two currencies.  On the foreign exchange market, the exchange rate is a five-digit display, such as:

Euro EUR 0.9705

Japanese Yen JPY 119.95

Sterling GBP 1.5237

Swiss franc CHF 1.5003

Smallest unit of change in the exchange rate to a point, that is the last digit of a number changes, such as:

Euro EUR 0.0001

Japanese Yen JPY 0.01

Sterling GBP 0.0001

Swiss franc CHF 0.0001

According to international practice, usually with three letters of the alphabet to represent the name of the currency, this Chinese name in English to English, of the currency code.

Exchange rate list price mode is divided into two kinds: direct quotation and indirect quotation.

(1) Direct quotation

Direct quotation, also known as cope with quotation method, is based on a certain unit (1、100、1000、10000) Standard to calculate how much should be paid for in foreign currency units of national currency. Is equivalent to calculating how much currency to buy certain units of foreign currency, so called meet the price. Most countries in the world, including China, are using direct quotation. At the international foreign exchange market, Japanese yen, Swiss franc, Canadian dollar are considered as direct quotation, as Yen 119.05 dollar to 119.05 yen.

In directly price method Xia, if must units of foreign currency equivalent of currency amounts than early, is description foreign currency currency rose or currency currency fell, called Exchange exchange rate rose; instead, if to with than original less of currency that can exchange to same amounts of foreign currency, this description foreign currency currency fell or currency currency rose, called Exchange exchange rate fell, that foreign currency of value and exchange rate of were mixed into is proportional to the.

(2) Indirect quotation

Receivable in indirect quotation, also known as quotation. It is based on a certain units (  1 Unit ) domestic currency standard, to calculate the number of units of the foreign currency receivable. At the international foreign exchange market, euro, British pound, Australian dollar are considered as indirect quotation. As the euro 0.9705 Euro 0.9705 dollars.

In indirect quotation in the national currency amount remains the same, the amount of foreign currency as the local currency and subject to change. If a certain amount of local currency can change less than the amount of foreign currency, which over the previous Ming foreign currency rise and decline in value of the local currency, the exchange rate rose; Conversely, if a certain amount of currency exchange foreign currency amount, then the decline in foreign currency, local currency rose in value, the exchange rate fell, that is inversely proportional to the value of foreign currency and exchange rates rise and fall.

Quotations in currency markets generally two-way quote, quote and quote their bid and ask price, determined solely by the customer trading direction. Bid and ask price difference smaller mean lower costs for investors. Interbank trading offers spreads as normal as 2-3 points, banking ( or dealer ) offer spreads to the customer in accordance with individual situations vary greatly,  at present spread margin trading quotation in 3-5 Hong Kong 6-8 , domestic banks is trading at 10-40 points.

3 Our foreign exchange market

At present there are many kinds of financial products in the world market, but generally can be divided into: stock market, interest rate market ( Including bond, commercial paper ) And gold market ( Including gold, Platinum, silver ) And futures markets ( Including grain, cotton, oil, etc ) , Option market and foreign exchange market.

The foreign exchange market, refers to foreign exchange trading market, or is a place of exchange between different currencies. Foreign exchange market exists because:

ü Trade and investment

Importers and exporters paid upon the import of a currency while charging another currency on exports. This means that, when they settle, paying and receiving different currencies. Therefore, they need to receive some of the currency exchange can be used to buy commodity currencies. Similarly, a company that buys foreign assets must be paid with state money, so it needs to exchange the national currency into the currency of the parties.

ü Speculation

Exchange rate between two currencies increases as the two currencies varies between supply and demand. Trader buys a currency in a currency, and throws the currency in a more favourable exchange rate, he can profit. Most of the speculation about the foreign exchange market.

ü Hedging

Due to fluctuations in the exchange rate between two currencies, who own foreign assets ( Such as factories ) When the company will be converted into the national currency of these assets, you may be subject to some risk. When foreign currency denominated foreign asset value over time is constant, if the exchange rate changes to domestic currency translation when the value of this asset, will produce profit and loss. Companies can hedge against the Elimination of the potential gains and losses. This is the implementation of a foreign exchange transaction, its trading results offset by exchange rate gains and losses arising from foreign currency assets.

Speculation in foreign exchange market as an international capital market history than the stock market, gold, futures, interest is much shorter, however, it rapidly at an alarming rate. Today, the foreign exchange market daily turnover has reached 1.5 trillion dollars, a scale far greater than other financial products such as shares, futures market, has become the world's largest single financial market and speculative markets.

Since the birth of the foreign exchange market since the exchange rate volatility of the foreign exchange market is growing. 1985 years 9 months,1 Canadian dollar 220 yen, 1986 years 5 months 1 dollar can only change 160 yen, in 8 months, the Yen's 27%. In recent years, the foreign exchange market volatility is even larger,1992 years 9 months, 8 days,1 British pound 2.0100 Us $ 11 Month 10 Day, 1 U s 1.5080 Dollars in just two months, sterling exchange rate against the dollar has lost 5000 More devaluation 25% 。 Not only that, at present, increased exchange rate volatility on the foreign exchange market every day, were mixed a day 2% to 3% is common. 1992 years 9 months, 16 day GBP/USD from 1.8755 fell to 1.7850, Sterling fell one day 5%.

Lesson three  Characteristics of the Forex market

In recent years, the foreign exchange market as more and more people favor, becoming the new darling of international investors, is closely related to the characteristics of this Exchange. Foreign exchange market is characterized by:

1 , There is no

Western industrial countries in the financial sector there are basically two sets of systems, the centralized sale of Central operations and there is no uniform fixed places of business networks. Stock trading through the Exchange's. Like the New York Stock Exchange, London Stock Exchange, Tokyo Stock Exchange, are the United States, Britain, Japan shares the main trading places, focus on sale of financial products, the quotation, trading and settlement procedures are uniform requirements, and set up a trade association, developed a code of conduct. Investors through brokerage firms required for the sale of goods, which is " City ". While the Forex trading market is through a unified operation

Business networks, unlike stock exchanges unified and centralized location. However, the foreign exchange trading network is global, and formed the organization without organization, the market is made up of generally-accepted methods and advanced information systems contact, traders do not have membership in any organization, but you must get the trust and recognition of the industry. The Forex market is that there is no uniform ground called " City ". Global foreign exchange markets mean trillions of dollars in transactions every day. Such a huge huge amount of money, this is neither a centralized place without a central clearing system controls, as well as not completed under the supervision of the liquidation and transfer of Government.

2 , Recycling jobs

Due to the global financial centres geographically, Asia, Europe, the Americas market due to the time constraint, into a full-day 24 Hours of continuous operation of the global foreign exchange market. Morning 8 when half ( New York time ) opened in New York,9 half when Chicago markets opened,10 half open in San Francisco, 18 When opened in Sydney, 19 When Tokyo opened 20 When Hong Kong and Singapore opened in the morning 2 Opening of the half when Frankfurt, 3 When the London market opened. 24 hours continuous operation, the foreign exchange market as a day and night market, only on Saturdays, Sundays and major holidays of various countries, the foreign exchange market will be closed. This continuous operation, providing investors with no barriers of time and space the ideal place for investment, investors can look for the best opportunity for the transaction. For example, if investors buy Yen in the morning on the New York market, late yen after Hong Kong's market opened up, investors in the Hong Kong market to sell, regardless of where the investor himself, he is involved in any market, any time of the sale. Therefore, the Forex market can be said to be a market with no barriers of time and space.

3 , Zero-sum games

On the stock market, a stock or the market goes up or down, then a stock's value or stock value rises or falls in the stock market as a whole, such as Nippon Steel's stock price from 800 Yen 400 Yen, Nippon Steel halved the value of all shares. However, in the foreign exchange market, fluctuations in the exchange rate represents the amount of value changes and changes in the stock value of totally different, this is because the exchange rate is the currency rate of exchange between the two countries, changes in the exchange rate is the value of one currency in reducing the increase in value of one currency with another. As in 22 years ago,1 Canadian dollar 360 yen, at present,1 Canadian dollar 120 temporary, this indicates that the value of the yen rose, And the falling value of the dollar, from the total amount of value, come and go, not adding value, will not reduce the value. Therefore, Forex trading is has been described as " a zero-sum game ", and more specifically is a transfer of wealth. In recent years, more and more funds into the foreign exchange market, increasing volatility in the exchange rate, increasing scale of wealth transfer, speed is also faster, to global forex daily 6 trillion-dollar turnover to calculate, rising or falling 1%, that is, 60000 Billion in funding for the new owner. Although the exchange value of the currency has changed a lot, but any kind of currency does not become waste paper, even if a falling currency, however, it will represent a certain value, unless announced the abolition of the currency.