Forex trading quote

Foreign exchange is usually represented by “FX” or “FOREX” and is the largest financial market in the world. Foreign exchange usually comes in the form of a "Currency Pair". In the currency pair, the top currency is called Base Currency, the latter is called Counter Currency, and the foreign exchange quote indicates how much the base currency of each unit can be exchanged. "relative currency." For example, EUR/USD (EUR/USD) = 1.3100, which means that 1 Euro can be exchanged for 1.3100 USD.

 

Foreign exchange trading characteristics

 

All-weather trading

 

Forex trading is a 24-hour trading market. The New Zealand market took the lead in opening the market, then Sydney, and then to Tokyo, London and New York. Investors can participate in trading at any time from Monday morning to early Saturday morning.

 

High market transparency

 

Investors in Forex trading are distributed globally and the market is difficult to manipulate. In addition, the factors affecting the foreign exchange market are wide, including interest rates set by the local central bank, stock market, economic environment and data, policy decisions, various political factors and even major events. These factors are not controlled by a single investor or group.

 

High liquidity

 

The foreign exchange market is one of the largest financial markets in the world economy. Market participants include banks, commercial institutions, central banks, investment banks, hedge funds, governments, currency issuers, note-issuing banks, multinational organizations and retail investors. The liquidity of funds is extremely high, and investors do not have to bear the investment risks caused by the lack of trading opportunities.

 

Two-way transaction

 

Forex trading is buying one currency and selling another currency. If investors are optimistic about the trend of a certain currency, they can choose to buy in the market; if they are bearish on the trend of a certain currency, they can choose to sell in the market. . Investment opportunities are more flexible and rich.

 

Main trading currency

 

US dollar (USD)

 

It has a leading position in the foreign exchange market. Most of the currency combinations use the US dollar as the base currency or relative currency. The US dollar is the main foreign exchange savings currency of central banks. Therefore, the political and economic status of the United States in the world is the biggest factor affecting the dollar price. Due to the close relationship between the domestic market, the stock market, and the bond market, the flow of funds in various markets is very high. Therefore, the main economic data of the United States and the exchange rate of the US dollar also have a direct impact.

 

Euro (EUR)

 

The euro is the currency of the 17 countries of the European Union (EU), the second largest currency in the world, and the second largest reserve currency of the central banks of all countries. The EU now has 27 member states and is the world's largest economic entity. Its members come from a number of sovereign and independent countries. The differences in political culture and economic development between countries lead to contradictions within the EU. The European Central Bank strictly controls inflation and the EU promotes the economy. The policy effect of the reform has not been significant, and it has become a factor in the development of the euro. The euro is the main alternative investment currency for the US dollar, so the euro should benefit most directly when the dollar is weak.

 

Japanese Yen (JPY)

 

Japan is the largest investor and creditor in the world and the country with the most reserves in the world. The Japanese economic environment affects the flow of yen funds and affects the global economy. If the market rebounds in the Japanese economy, the yen exchange rate will rise, meaning that funds will return to the Japanese market, thus affecting the long-held Australian dollar, Canadian dollar and New Zealand dollar bonds. And a variety of influential investment products. Due to the Japanese economy entering the recession in the past year, coupled with the lack of natural resources, the economy has long relied on exports, which constitutes an uncertain factor in the exchange rate of the yen. As the yen interest is close to zero, when the dollar moves strongly, the dollar-yen yen buying will emerge to earn interest margins, which is popular with speculators.

 

British pound (GBP)

 

The United Kingdom is a global oil and gas producer and one of the seven largest industrial countries in the West. It is also the largest foreign exchange, insurance finance and trade center in the world. The trend of the pound is directly affected by the flow of funds. When investors reduce their holdings of British stocks and properties, the pound will be under pressure. As the euro comes out, the proportion of investors holding the pound is falling.

 

Canadian dollar (CAD)

 

Canada is one of the seven industrial countries. It is rich in natural resources, social, political and economic environment is quite stable. The country contains a lot of minerals and energy. The agriculture is developed and the agricultural products are rich. Exporting foreign trade is an important factor affecting the Canadian dollar. When the price of commodities and oil When it rises, funds will flow into Canada, and the Canadian dollar will be supported.

 

Australian dollar (AUD)

 

Australia is rich in natural resources and is an important exporter of minerals and agricultural products. The rise in commodity prices has caused funds to flow into Australia, which is beneficial to the Australian dollar. In recent years, Asia has become Australia's main export region, so the Asian economic situation directly affects the Australian dollar.

 

New Zealand dollar (NZD)

 

New Zealand and Australia have similar economic bases. The New Zealand dollar is also a commodity currency, but New Zealand exports are heavily agricultural and wood-based, and are more affected by demand for Asian raw materials.

 

Swiss Franc (CHF)

 

Switzerland is a traditional neutral country. The Swiss franc is also a traditional safe-haven currency. During political turmoil, it can attract safe-haven capital inflows. In addition, the Swiss Constitution stipulates that every Swiss franc must have 40% of gold reserves, although this regulation It has expired, but the Swiss franc still has some psychological connection with the price of gold. The rise in the price of gold can drive the Swiss franc to rise to a certain extent. In a special period, especially when political turmoil triggers a large demand for it, it can quickly push up its exchange rate and easily overvalue its currency. On September 6, 2011, the Swiss National Bank suddenly announced the linking of the Swiss franc to the euro, limiting the exchange rate to 1 euro to 1.2 Swiss francs.

Contract specification

Product Name	Forex trading
Number of orders per order	Max 10 hands
Maximum position amount	60 hands
Contract Unit	100,000 base currency
Overnight interest	Customers can obtain or have to pay overnight interest rates, interest rates refer to overnight interbank interest rates, and receive 3 days of overnight interest on Wednesday
Transaction time	Beijing time Monday 08:00 to Saturday 03:00 (summer time) Monday 08:00 to Saturday 04:00 (Winter time)
leverage multiple	about 100:1
Initial Margin Requirements	1000 USD
Pre-fake margin requirements	2000 USD
Additional Margin Notice	When the net value is less than or equal to 50% of the initial margin, the system notifies the customer to increase the margin
Forced liquidation	When the net value is less than or equal to 20% of the initial margin, the system will lock all pairs from the account according to the market price

*The above rules may be modified in response to market changes without prior notice
*This contract does not accept Hong Kong or US identity card holders to apply

Forex is a two-way transaction, which can be either long (buy up) or short (buy down). Simply put, if you think the exchange rate will climb, buy it; if you think it will fall, sell it. If the direction is judged correctly, you can make a profit. Please refer to the following "EUR/USD" trading example for the relevant calculation principle.

 

EUR/USD profit and loss calculation formula:

 

* Closed position on the same day, no need to pay overnight interest; actual overnight interest is subject to the platform display

 

If you trade through the platform: buy 0.5 lots of EUR/USD (1 lot = 100,000 Euros),

 

The purchase price is 1.3010, and the position is closed at the selling price of 1.3060 on the same day.

 

The total profit and loss is:

 

(Selling Price – Buying Price) x Contract Unit x Trading Lot ± Overnight Interest

 

= (1.3060 - 1.3010) x 100,000 x 0.5 ± 0 - 0

 

= $250

 

If you trade through the platform: buy 1 lot of EUR/USD (1 lot = 100,000 Euros),

 

The bid price is 1.3120 and will be closed at the selling price of 1.3100 on the next trading day. The overnight interest rate is -7.29 USD.

 

The total profit and loss is:

 

(Selling Price – Buying Price) x Contract Unit x Trading Lot ± Overnight Interest

 

= (1.3100 – 1.3120) x 100,000 x 1 – 9.11 – 0

 

= -209.11 USD


Glossary

Currency Pair

consists of two codes representing different currencies plus a delimiter; for example, EUR/USD (Euro dollars), in the foreign exchange market, the currency is traded in pairs. The two constituent currencies of a currency pair are interrelated and inseparable.

Their exchange price is called the exchange rate.

Classification of currency pairs

There are generally two types, straight currency and cross currency. Straight: In simple terms, it is a currency pair with a US dollar (for example, Euro USD, USD Yen); a relatively “crossover” refers to a currency pair that does not contain USD (eg “Euro Yen”, “Euro Pound” ).

What is the exchange rate

Due to the different names of currencies in different countries and different currency values, a country's currency must set an exchange rate, that is, the exchange rate, for the currencies of other countries. The exchange rate, also known as the "exchange rate", is the ratio of a country's currency to another country's currency, that is, the price of another currency in one currency.

Foreign exchange quotes are generally listed in terms of “currency pairs”, such as “euro dollar”, “dollar yen”, “euro yen”, and so on. The most frequently traded currency is often referred to as the “major currency”. Trading in most currencies is done in US dollars (USD). The US dollar (USD) is the most traded currency. The next five frequently traded currencies are: Euro (EUR); Japanese Yen (JPY); British Pound (GDP); Swiss Franc (CHF) and Australian Dollar (AUD). The trading of these six major currencies accounts for the vast majority of the global foreign exchange market.

Base Currency and Pricing Currency

The exchange rate is changing rapidly. The supply and demand of the market determines the value of the currency. The value of one currency in the foreign exchange market is represented by another currency. In a currency pair, the first currency is called the “base currency” and the second currency is called the “counter currency” or “relative currency”.

Buy and Sell Price

When you trade, you will also see two quotes for a currency pair: one is called the "sell price" and the other is the "buy price." The selling price is the trading price at which you sell (or short) the pair, and the buying price is the price at which you buy (or do more). Forex trading is simple. If you think the exchange rate will rise, buy it; if you think the exchange rate will fall, sell it.

For example, the EUR/USD sell price is 1.2422 and the buy price is 1.2424: if you want to sell, the transaction price is 1.2422; if you want to buy, the transaction price is 1.2424.

Transaction Costs

You may have found that there is often a difference between the selling price and the buying price. The difference between the buying and selling price is called the “selling spread”, also called “spread”. In all foreign exchange transactions, spreads are ubiquitous and are the main transaction costs of investors. Spreads are mainly affected by market liquidity or fluctuations. When you trade, you can check the latest trading spreads in real time by logging into the trading platform.

Lots:

When trading each currency pair in the foreign exchange market, a certain amount of margin (deposit) is required as a support; the required margin (deposit) is different for each currency pair, and the trading unit indicates the volume by [hand], 1 standard Hand = the amount of margin required for each currency pair.

Number of contracts:

Refers to the quantity traded in the 1 foreign exchange contract. The contractual unit of a 1 foreign exchange contract is 100,000 base currency. For example, the contract unit of 1 lot of EUR/USD is 100,000 Euros, and the contract unit of 1 USD/JPY is 100,000 USD.