foreign exchange market (foreign exchange market) , It can also be called"foreign exchange" (forex) , "FX"It is the largest financial market in the world. With the New York Stock Exchange (Daily trading volume$1000 a hundred million)   In comparison, The daily trading volume in the foreign exchange market far exceeds this number, Gundam 4 Trillion dollars , So the trading volume of the foreign exchange market is the most important financial trading venue in the world, Provide numerous opportunities for investors involved in foreign exchange trading.

There is no commission for general foreign exchange trading, No fixed unit quantity, The transaction cost is also relatively low, It only involves buying/Selling price difference. At the same time, the foreign exchange market 24 Open every hour, Investors will have the flexibility to choose a trading time that suits them, And what is clearly different from trading individual small and medium-sized stocks is, No independent investor can monopolize the foreign exchange trading market. In addition, Foreign exchange trading usually involves leveraged trading, Investors only need a small margin to control a very large total contract value, Leverage provides investors with the ability to obtain high profits (But at the same time, the losses will also be magnified) . High liquidity, Low entry threshold, Plus, various free tools are everywhere in the market, All benefits of foreign exchange trading.

Please note: Margin forex is a high-risk investment, Not suitable for all customers, Please read carefully before choosing to start tradingOur company's legal disclosure documents.

There are many factors that affect the medium to long term direction of the foreign exchange market, Including interest rates (Interest rate) , gross domestic product (GDP) , Non farm employment in the United States (NFP) , Consumer Price Index for Residents (CPI) , Producer Price Index (PPI) , Durable goods order, Number of people applying for unemployment benefits, Industrial Production Index (Industrial Production Index) , Trade balance (Trade Balance) , unemployment rate (Unemployment rate) , Retail Sales (retail sales) Waiting for data, The gap between different published data and expected values, Will have different impacts on currency pairs.

And the non farm employment figures in the United States (NFP) It is one of the important factors affecting foreign exchange. The increase in non farm employment and average wages indicates employment growth and potential inflationary pressures, Generally, the Federal Reserve will suppress it by raising interest rates, This will benefit the US dollar; Conversely, If non farm employment continues to decline to a certain extent, it indicates an economic slowdown, The probability of interest rate cuts may increase, Bearish on the US dollar.

In addition, The interest rate decisions of central banks in various countries are another important factor affecting foreign exchange. Taking the United States as an example, The interest rate decision is made by the Federal Reserve's interest rate meeting. Interest rate resolution is important, It is because central banks of various countries will consider multiple factors such as their own economic growth status, domestic inflation, and unemployment rate, Formulating monetary policy, Formulate interest rate resolution, So the interest rate decision determines the direction of interest rates in the country for a period of time in the future.

If a central bank of a country decides to lower interest rates, The income from future cash deposits will decrease, Will cause local currency funds to flow from banks to the market, Encourage investment and consumption, Promote economic development, At the same time, the market's demand for the country's currency has declined due to a decrease in returns, It also increases the pressure of currency depreciation. on the contrary, If we raise interest rates, The borrowing cost will correspondingly increase, The corresponding decrease in working capital in the market, Therefore, there is a suppression of consumption, The role of curbing inflation, at the same time, An increase in yield will also attract funds to exchange for the country's currency, The possibility of currency appreciation increases.

There are various types of foreign exchange currency pairs, To choose to start forex trading, Most investors would choose to start with major currency pairs first. And the main currency pairs, It refers to currency pairs involving the US dollar. The most popular among investors are in Europe and America (EUR/USD) , The United States and Japan (USD/JPY) Waiting for the main.

This is because the country of this currency pair has a significant international influence, High trading volume, Therefore, it has high liquidity in the market, And the wave amplitude is also large, From time to time, there will be significant news and data releases  (for example: Nonfarm Payrolls (NFP)   / inflation rate / Central bank policies) , Easy for investors to analyze and judge trends. Therefore, it will be relatively easy for investors to get started with these currency pairs.

Foreign exchange trading refers to buying a currency, Simultaneously selling another currency as a trading method. Currency is traded through brokers or traders, Trade in pairs, For example, Australian dollar/dollar (AUD/USD) Or in pounds/Japanese yen (GBP/JPY) .

Major global currency pairs

with NZD for example: NZ Representing New Zealand, D Representing Yuan.

The currency pairs appearing in the above chart are usually referred to as "Major currency pairs" , Because they are the most widely used.

The main participants in the foreign exchange market are commercial banks, They are the backbone of the foreign exchange market, Large scale foreign exchange transactions are mostly handled in foreign exchange banks.

In addition, There are also forex brokers who engage in forex trading brokerage activities. These people are usually approved by local central bank branches. Foreign exchange brokers usually do not buy or sell foreign exchange, Act as a bridge between foreign exchange buyers and sellers, Mainly relies on collecting transaction fees or commissions as income.

In addition, There are importers, exporters, and other foreign exchange suppliers and demanders. Importers and exporters are both demanders of foreign exchange (When importing) Another supplier of foreign exchange (When exporting) , Other foreign exchange suppliers and demanders refer to non trade foreign exchange buyers and sellers, Like sightseeing tourists.

Finally, There are also foreign exchange speculators, multinational corporations, central banks, and foreign exchange management agencies involved in speculation. As for the trading participants, Mainly trading brokers, speculators, and underlying product liquidity providers, exchanges.

The foreign exchange market can be divided into four main trading periods: Sydney Time, Tokyo Time, London time slot, New York trading session. Here are the opening and closing schedules for each market:

summer

Winter

As can be seen from the table above, There are always times when two time periods overlap. These times are the busiest trading periods of the day, Because two markets operate at the same time, So there is more trading volume at this moment, It is also the time when the most investors choose to trade.

Foreign exchange is quoted in the form of currency pairs, Like pounds/dollar (GBPUSD) Or in US dollars/Japanese yen (USDJPY) . In every foreign exchange transaction you make, You have bought one currency while also selling another. This is an example of the British pound against the US dollar: GBP/USD = 1. 51258

in slash ("/") The first currency on the left is called the base currency (The pound in the example) , The second currency on the right is the quote currency (That is, the US dollar in the example) . The base currency is used when buying or selling "basis" . If you buy pounds/dollar, This means that you have purchased the base currency, Simultaneously sold the quoted currency, that is "Buy GBP, Sell USD. "   If you believe that the base currency will appreciate relative to the quoted currency (Exchange rate appreciation) words, So you should buy it. on the contrary, If you believe that the base currency will depreciate relative to the quoted currency (Exchange rate depreciation) , So you should sell it.