foreign exchange market (foreign exchange market) , It can also be called"foreign exchange" (forex) , "FX"It is the world's largest financial market. With the New York Stock Exchange (Daily trading volume$1000 Billion)   If compared, The daily trading volume in the foreign exchange market far exceeds this amount, up to 4 Trillion US dollars , So the trading volume of the foreign exchange market is the most important financial trading venue in the world, Providing many opportunities for investors involved in foreign exchange trading.

Generally, there is no commission for foreign exchange transactions, No fixed unit quantity, The transaction cost is also relatively low, Only involving buying/Selling price difference. Simultaneously in the foreign exchange market 24 Hours open, Investors will have the flexibility to choose the time that suits them for trading, And clearly different from trading individual small and medium-sized stocks, No independent investor can monopolize the foreign exchange trading market. in addition, Foreign exchange transactions typically involve leveraged transactions, Investors only need a small margin to control a very large total contract value, Leverage gives investors the ability to earn high profits (But at the same time, the losses will also be magnified) . High liquidity, Low entry threshold, Plus, various free tools are ubiquitous in the market, All benefits of foreign exchange trading.

Please note: Margin foreign exchange is a high-risk investment, Not suitable for all customers, Please review carefully before choosing to start tradingLegal Disclosure Documents of Our Company.

There are many factors that affect the medium to long term trend of foreign exchange market, Including interest rates (Interest rate) , gross domestic product (GDP) , Non farm employment in the United States (NFP) , Consumer Price Index of Residents (CPI) , Producer Price Index (PPI) , Durable goods orders, 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) Equal data, Differences between different published data and expected values, Will have different impacts on currency pairs.

And the number of non farm workers in the United States (NFP) Is one of the important factors affecting foreign exchange. The increase in non farm employment and average wages indicates an increase in employment growth and potential inflationary pressures, Generally, the Federal Reserve will suppress it by raising interest rates, This will benefit more dollars; conversely, If non farm employment continues to decline to a certain extent, it indicates an economic slowdown, May increase the probability of interest rate cuts, Bearish USD.

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

If a central bank decides to lower interest rates, Future cash deposit returns will decrease, Will cause local currency funds to flow from banks to the market, Encourage investment and consumption, Promoting economic development, At the same time, the market's demand for the country's currency has declined due to reduced returns, It also increases the pressure on currency depreciation. contrary, If interest rates are raised, Then the borrowing cost will correspondingly increase, Corresponding decrease in liquidity in the market, Therefore, there is a suppression of consumption, The role of curbing inflation, meanwhile, An increase in yield will also attract funds to be converted into the country's currency, Increased likelihood of currency appreciation.

There are various types of foreign exchange currency pairs, To choose to start foreign exchange trading, Generally, investors choose to start with major currency pairs. And the main currency pairs, Refers to currency pairs involving the US dollar. Most popular among investors in Europe and America (EUR/USD) , US and Japan (USD/JPY) Etc.

This is because the currency has a significant international influence on the country, High trading volume, Therefore, it has high liquidity in the market, And the amplitude is also large, Occasionally there will be significant news and data releases  (for example: Nonfarm Payrolls (NFP)   / Inflation rate / Central Bank Policy) , Easy for investors to analyze to determine trends. Therefore, these currencies will be relatively simple for investors to enter the market.

Foreign exchange trading refers to buying a currency, Trading method of selling another currency at the same time. Currency through a broker or dealer, Trading in pairs, For example, Australian dollars/dollar (AUD/USD) Or pounds/Japanese yen (GBP/JPY) .

Major global currency pairs

with NZD take as an example: NZ Representing New Zealand, D Representative element.

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, Is the backbone of the foreign exchange market, Large foreign exchange transactions are mostly handled in foreign exchange banks.

in addition, There are also foreign exchange brokers who engage in foreign exchange trading brokerage activities. These individuals 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 relying on collecting handling fees or commissions as income.

in addition, Import and export merchants and other foreign exchange suppliers and demanders. Importers and exporters are both demanders of foreign exchange (At the time of import) Also a supplier of foreign exchange (At exit) , Other foreign exchange suppliers and demanders refer to buyers and sellers of non-trade foreign exchange, Like a tourist.

last, There are also foreign exchange speculators, multinational corporations, central banks, and foreign exchange management agencies involved in speculation. Regarding trading participants, Mainly trading brokers, speculators, and underlying product liquidity suppliers, exchanges.

The foreign exchange market can be divided into four main trading periods: Sydney period, Tokyo period, London time slot, New York trading session. The following is the opening and closing schedule for each market:

summer

winter

You can see from the table that, There are always times when two time periods overlap. These are the busiest trading hours of the day, Because two markets are operating at the same time, So there's more trading volume at this moment, It is also the time when investors choose to trade the most.

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

stay Diagonal line ("/") The first currency on the left is called the base currency (The pound sterling in the example) , And the second currency on the right is the quotation currency (In the example, the US dollar) . The base currency is when buying or selling "Based on" . If you buy pounds/dollar, This means that you have purchased the base currency, Simultaneously sold the quoted currency, That is "Buy GBP, Selling USD. "   If you believe that the base currency will appreciate relative to the quoted currency (Exchange rate rise) The words, So you should buy. contrary, If you believe that the base currency will depreciate relative to the quoted currency (Exchange rate decline) , So you should sell.