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What is Forex Trading? What is the profit principle?

May 12 2022 at 09:31
7 posts
The transaction is abbreviated as FX transaction, which is called foreign exchange margin transaction (Foreign Exchange) in Chinese. Common currency pairs are EUR/USD (EUR/USD), USD/JPY (USD/JPY), GBP/USD (GBP/USD), etc.
For example, buy dollars when 1 dollar = 100 yen. Wait until the dollar exchange rate rises to 101 yen and sell, you can get 1 yen (101-100=1) interest.
In the above exchange transactions, you can profit from the exchange rate difference between buying and selling the currency.
Furthermore, in addition to buying and selling currency differences, you can also take advantage of the interest rate difference between the countries where the two currencies belong to profit from the overnight interest generated (exchange point).
For example, when trading USD/JPY, assuming the US dollar interest rate is 5% and the Japanese yen interest rate is 1%, you can get a 4% difference in one-day exchange rate when buying the US Dollar.
Basic Forex Terminology
There are several terms used in foreign exchange trading. To help the transaction run smoothly, remember to memorize these terms.
Below, the following gathers the terminology that should be remembered especially by beginners in trading.
Terminology Description
Leverage (leverage) can be traded at a value several times greater than the margin
Spread The difference between the sell price and the buy price
Forced liquidation: When the effective margin is less than the required margin, the position will be forced to close. Also known as 'exploding'.
Slippage The difference between the order price and the agreed price
Stop Loss (Stop Loss) A trade that determines the loss
margin money used to secure transactions
In addition to the above, there are many other terms used for foreign exchange transactions. But you don't need to memorize all the terms at once, just accumulate them little by little.
exchange margin
The foreign exchange margin is the deposit that must be paid when carrying out foreign exchange operations.
The minimum transaction unit calculation method for foreign exchange transactions is calculated by 'minimum transaction unit (1,000 coins) ÷ leverage'.
For example, USD/JPY for 1000 currencies (200 times leverage) is '1000÷200=5' and USD 5 is the minimum margin required.
Before you start trading, you should get a sense of how much money you really need to prepare for the transaction.
The above content is a basic understanding of foreign exchange trading. If you want to know the content of the copy, pay attention to: fxcashbackking .com
Jul 05 2022 at 00:22
39 posts
The foreign exchange (also known as forex or FX) market is a global marketplace where national currencies are exchanged. Because of the global reach of trade, commerce, and finance, forex markets are the world's largest and most liquid asset markets. Currencies are traded in pairs as exchange rate pairs.
Marcel Durham (MarcellusLux)
Jul 12 2022 at 14:52
277 posts
If a trader is still at the stage of studying terms, then it is too early to start trading. At the very beginning, it is important not only to learn the terms, but also to try them in TRAINING practice. From learning the terms to real trading, there are a lot of hours, effort and training.
Jul 16 2022 at 07:53
119 posts
These scam brokers pose a threat to the survival of traders. Traders should keep themselves out of such scam brokers for their own safety.
Sep 09 2022 at 07:19
80 posts
Forex trading basically determines the exchange rate of the currencies and you can earn profit with the simple logic that you can simultaneously buy one currency and sell another no matter what the market position is, so you should know how to study the market movement in order to make some good returns.
Sep 17 2022 at 18:14
183 posts
A trader must nurture the wish of self-development otherwise earning success will be difficult for traders. One of the phases of self-development is to avoid over and over mistakes.
Sep 19 2022 at 07:35
63 posts
There are a lot of trading indicators you will find on the platform provided by your broker. Bollinger bands and moving average seem to be good indicators.
Sep 20 2022 at 08:07
40 posts
Forex trading usually revolves around change in currency prices to make profits. Your position of buy/sell and market movements usually determine the kind of returns one shall make. I think the market is very accessible to everyone and keeps a good potential of making returns but requires extensive knowledge.
Sep 26 2022 at 09:25
26 posts
Well said. But the profit principle actually depends on your consistency with your strategy. When you build a strategy, you have to be consistent with it for a long period of time. So that you can make the required changes when the market behaves differently, and can master profiting in a given currency pair at any situation.
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