2024-05-07 11:36:17
Table of contents
1. How to conduct foreign exchange transactions
2. How to choose a reliable foreign exchange trading platform
3. How to choose a suitable foreign exchange trading account
4. How much does it cost to open a foreign exchange account?
5. Forex trading analysis methods
6. Formulate a foreign exchange trading strategy
8. Risk management and mentality building
introduction:
Foreign exchange also refers to the foreign exchange market, which is a global, decentralized and major investment market involving trading activities in various foreign exchange currencies. In the foreign exchange market, investors can invest and gain profits by paying attention to changes in the price trends of currency exchange rates. For market beginners, they need to master more basic information so that they can calmly deal with market challenges. In order to achieve this goal, JRFX has also prepared trading skills for foreign exchange investment beginners. Share, hoping it will play a role in future foreign exchange investment activities.
Forex trading is a financial market transaction that involves the exchange of one country's currency for another country's currency. This market has no specific location and no central exchange. Instead, transactions are conducted through an electronic network between banks, businesses, and individuals. Forex trading is primarily conducted in currency pairs, such as Euro/USD (EUR/USD) or US Dollar/Japanese Yen (USD/JPY). In a currency pair, one currency is bought while the other currency is sold.
There is no actual place in the foreign exchange market, and foreign exchange transactions are conducted through foreign exchange trading platforms. This platform typically provides real-time quotes, charts, and technical analysis tools so that investors can make more informed investment decisions. Before starting trading, investors need to open a foreign exchange trading account. This account allows access to the foreign exchange market and transactions. Once the account is opened, investors can start trading foreign exchange.
But this market consists of close to 4,500 large international banks and foreign exchange dealers. Individual traders who hope to profit from exchange rate changes can only participate in the foreign exchange market through foreign exchange dealers, such as the JRFX website.
There are many foreign exchange margin traders (also called brokers) in the current market, and they come from different countries and regions. On the surface , these traders seem to be similar, which causes great difficulties for investors who are new to the foreign exchange market. . For investors who are new to the foreign exchange market, they should pay attention to the following aspects when choosing a foreign exchange dealer.
When choosing a foreign exchange dealer, you should check what regulatory agency the foreign exchange dealer is registered with and whether it is regulated by government departments. For example, JRFX is not only supervised by the authoritative financial institution BVIFSC, but also holds a New Zealand financial regulatory license. It is also supervised by the Dubai Multi Commodity Trading Center (DMCC). Multiple supervision provides a safer and more secure investment environment.
The chosen broker should be able to provide at least six major currency pairs, so as to achieve a basic level of integration with the international market. In the actual investment process, JRFX provides customers with multiple currency pairs, including not only major currency pairs, but also cross currency pairs and exotic currency pair types.
Transaction fees are calculated in the form of spreads. The smaller the spread charged by the broker on each transaction, the greater the trading profit and the smaller the trading loss of the investor. Taking JRFX as an example, the dealer's spread is as low as 0.1 points , and there is no minimum requirement for the first deposit, which provides customers with more operational options.
There are three general contract sizes: standard lot, mini lot and micro lot. JRFX supports customers to choose the appropriate transaction size based on their actual situation and market conditions in order to achieve better investment benefits. Among them, micro-lot contract trading starts from 0.01 lots, which effectively relieves customers' financial pressure.
When investors choose a foreign exchange dealer, do not choose a dealer that re-quotes when the investor clicks on the price, nor one that allows the transaction price to slip. Investors need a dealer who can quickly complete the transaction at the price clicked by the investor, that is, the price the investor sees is the transaction price. For this reason , orders on JRFX are executed in milliseconds, operations are stable, transactions have zero delay, and customers can choose with greater confidence.
Simple operation is very important to investors. Foreign exchange traders must pay more attention to customer operations. The more user-friendly designs, the more investors like it. For example, the JRFX trading platform page design is simple and clear, making it easier for investors to place orders. The order interface has market price, limit price, and stop-loss hedging; the interface can be retained for a long time to facilitate short-term operations; non-market orders do not occupy margin, which facilitates the maximum use of funds.
After choosing a broker and platform for opening a foreign exchange trading account, investors need to learn how to open a foreign exchange trading account. This is an important link that foreign exchange investors need to master before entering actual foreign exchange trading. After mastering the relevant details involved in this link, investors can successfully apply for their own foreign exchange trading account and prepare for foreign exchange transactions.
When opening a foreign exchange trading account, investors can choose to open a foreign exchange real offer trading account or a foreign exchange margin trading account according to their risk tolerance and capital size.
(1) Opening an account for real foreign exchange trading is usually done at a bank. The characteristics of real trading are that the risks and returns are small, and the transaction fees are slightly higher, generally 10 to 30 points.
(2) Opening an account for foreign exchange margin trading refers to applying for an account through a foreign exchange broker (such as JRFX ) or directly on the website of a foreign investment company. Margin trading will have different benefits depending on the size of the transaction. Compared with the former, it is more popular. JRFX also provides a detailed introduction to the account opening process, which reduces the difficulty of operation and eliminates risks to a certain extent. possibility.
Different foreign exchange traders have different requirements for account opening funds. Some platforms charge higher fees, and some platforms charge lower fees. Customers need to collect more platform information for comparative analysis, and reduce openings while ensuring transaction security. Financial pressure during Forex trading.
According to the platform regulations on JRFX , customers do not need to bear clearing fees, transaction fees, government taxes, commissions and handling fees during the account opening and trading process, and the leverage range provided by the platform is 200:1-1000 : 1 , and the spread The fee is as low as 0.1 points , and the process fee is open and transparent, which increases transaction security.
After opening an account, foreign exchange traders can first use a demo account to learn and practice trading skills. When the technology matures, they can use a real account to make profits. In this process, it is necessary to avoid over-trading accounts: for each transaction, the margin occupied by the position is only a small proportion of the entire funds. For foreign exchange investors, the more margin available in the account, the risk will be The smaller it is, the greater its ability to withstand the risk of market fluctuations.
Fundamental analysis refers to the analysis of the currencies traded on the foreign exchange market and the economic and political conditions of the countries to which they belong. The commodity circulating in the foreign exchange market is currency, so the quality of the commodity is determined by the economic conditions of the country to which it belongs. The improvement or deterioration of the country's economic conditions will affect the exchange rate of its currency against other foreign currencies. JRFX platform has also prepared A large amount of relevant fundamental market information to help customers reduce the time cost of information collection.
Fundamental analysis focuses on the country's economic development, financial stability and changes in government policies to determine the supply and demand relationship of currency. If a country's economic growth is strong, its domestic currency must also be strong. This is mainly because the more prosperous a country's economy is, the more stable its currency will be, the more trust it will have relative to other currencies, and it will continue to strengthen relative to other currencies.
Foreign exchange is also a commodity, just a financial commodity. As long as it is a commodity, it must follow the price rules of the commodity. All price fluctuations are determined by the supply and demand of commodities. There are no unwarranted rises and falls. Generally speaking, price rises because there are more buyers than sellers, which pushes up prices. Prices fall because there are more buyers than sellers. Fewer people bring down prices. Overall, the balance of supply and demand in foreign exchange exchange determines the exchange rate of a currency.
Technical analysis refers to a collective term for various methods that use certain historical data to analyze and judge the future direction and extent of changes in the entire foreign exchange market or a certain currency. Technical analysis is mainly divided into two categories: mechanical trend trading and line trend trading.
Mechanical Trend Trading
Mechanical trend trading means that traders' buying and selling completely follow certain rules. When a certain long signal appears, they enter the market to buy; when a short signal appears, they enter the market to sell. Chart tools used in this type include point chart technology, moving averages, RSI lines and KD lines.
Things to note when using the mechanical trading method:
①Conduct transactions completely according to this method;
②Be able to tolerate irregular changes in market exchange rates.
Line trend trading
Line trend trading refers to a transaction that uses the technical knowledge of the line to determine the market. You must always pay attention to the trend of the long-term trend line (weekly or monthly) and find out the support and resistance levels of the market exchange rate.
Analyze technical and fundamental aspects: Forex traders can use technical analysis and fundamental analysis to predict the trend of exchange rates. Technical analysis mainly analyzes historical data through charts and indicators to predict future trends, while basic analysis predicts exchange rate changes by analyzing economic and political factors.
Control risks and fund management: Proper risk management is crucial for foreign exchange trading. Traders should set an appropriate risk tolerance and trade with an appropriate amount of capital to avoid overinvesting. To control risk, Forex traders should place stop-loss and take-profit orders when entering a trade. Stop-loss orders can limit losses, while take-profit orders can help lock in profits.
Continuous learning and practice: The foreign exchange market is a challenging market, and continuous learning and practice are very important to improve trading skills and experience. Traders can pay attention to market dynamics, attend training courses and seminars, and accumulate trading experience.
In the foreign exchange market, every country in the world releases nearly 20 major fundamental data to investors every year. The importance of these data will change as the economic situation changes. Data released by the state to investors to show the health and overall condition of the economy are called national economic indicators.
Most economic indicators or reports are released on a monthly, quarterly, or annual basis, but there are still some that are released on a weekly basis. The importance of economic indicators or reports varies. For example, gross domestic product (GDP), employment and non-farm payrolls reports are more important data. Relatively speaking, monthly, quarterly and annual data are more important, while data released on a weekly basis receive less market attention. All economic reports are in the government's financial release calendar and provide the date, time, data expectations or data change expectations and previous values.
Typically, investors pause trading just before data is due to be released. If the results are good, the currency may rise and vice versa. To be on the safe side, investors often wait for data to be released before considering entering the market. Within seconds after the data was released, a large number of buying or selling orders began to enter the market, which is likely to drive sharp price changes in the short term.
Psychological preparation for foreign exchange trading is an important part of foreign exchange trading strategies and techniques. Psychological expectation factors are the main influencing factors of changes in foreign exchange rates. If the public expects a certain currency exchange rate to rise, then strong buying will push the currency exchange rate to rise ; conversely, if a certain currency exchange rate is expected to fall, selling will Pressure on the currency will cause the currency exchange rate to fall.
At the same time, from a psychological perspective, foreign exchange traders will always have considerable one-sidedness and inherent flaws in their psychology and strategies, which constitute the biggest weakness of foreign exchange traders. Therefore, foreign exchange traders must overcome their own psychological weaknesses, pay attention to psychological adjustment, and engage in foreign exchange transactions with a healthy mentality.
In foreign exchange trading activities, some investors do not analyze the changes in the foreign exchange market or formulate careful investment plans, but engage in foreign exchange trading with a gambling mentality. Therefore, investors should not have a gambling mentality. They should not be dazzled by victory and not overestimate their own abilities, nor should they be enthusiastic and make all-or-nothing decisions.
Under normal circumstances, investors sometimes misread the market trend, or the trend suddenly reverses after buying, causing warehouse receipts to be trapped. These are normal phenomena. However, some investors have obvious misunderstandings due to insufficient information they have. Blind obedience mentality. In fact, from the perspective of the JRFX platform, based on the current daily transaction volume of the foreign exchange market, it is difficult for any individual to control it. The best way to stay rational and avoid blind obedience is.
According to the current development status of the investment market, there are mainly 4 different types of orders in the foreign exchange market
This kind of order specifically refers to an order that is executed according to the actual market price at that time when opening and closing a position. It should be noted that there is an average spread of 3 to 6 points between the buying and selling prices of each major currency. The trader's buying (buy) price is the trading platform's asking price (ask price), and the trader's selling (sell) price is the trading platform's buying price (bid price). Assuming you want to buy, the price you pay is the selling price of the trading platform, 1.2813. If you want to sell, the transaction price is the buying price of the trading platform, 1.2810. The buying and selling prices displayed on the trading platform are called market prices, and orders executed at the market price are market orders.
This refers to an order that is executed at a specified price when entering or exiting the market. Investors can enter and exit the market using preset prices. Using this kind of order, you can buy below the market price and sell above the market price. Likewise, limit orders are used to lock in some profitable exits.
Stop-loss orders are also used when entering and exiting the market. They are also pre-set at a specified price, but when the market reaches this price, it will become a market order, and slippage may occur at this time. When an investor specifies a buy order at a price higher than the current price or sets a sell order at a price lower than the current price, this is a stop loss order. Most stop-loss orders are orders that limit the extent of losses when exiting at a loss, that is, to protect the investor's account equity.
Before any trader decides to enter the market and start a transaction, he must have a corresponding trading plan and trade according to the plan. Every trade should have an entry point, an expected profit exit point, and a well-thought-out exit point with minimal loss if the market doesn't move in the direction you want.
Each buy order should have two corresponding sell orders, one to exit at profit and one to exit at stop loss. On the contrary, each sell order also has two corresponding buy orders, one for profit exit and one for stop loss exit.
To control risks, you must first understand what risks you are facing. In the process of foreign exchange trading, some activities have risks and some do not. Therefore, investors need to identify them. Simply put, it is to determine whether an activity has risks and what the risks include. Only by clearly identifying risks can a suitable management method be found. Here are five tips for identifying risks:
The exchange rate is not fixed, but a quantity that changes over time. Foreign exchange risk is caused by the fluctuation of the exchange rate at a certain point in time, and its impact must be related to time.
Although foreign exchange risk arises from unexpected fluctuations in exchange rates, the manifestations of foreign exchange risk in specific situations are quite different. When analyzing the causes of risks, we should not only examine the direct impact of exchange rate changes, but also fully consider its indirect effects and the mechanism, elements and extent of the indirect effects.
Generally, the consequences of risks can be estimated from both qualitative and quantitative aspects. Qualitative estimation is mainly an empirical judgment on the type of foreign exchange risk results; while quantitative estimation refers to the use of some quantitative methods to estimate and measure the possible results of risks.
The measurement of foreign exchange risk is divided into three levels: estimating the size of the insured position, estimating the risk probability and distribution, and estimating the direct impact of exchange rate changes on the risk-bearing entity in the future.
Analyze and determine the type based on its characteristics and differences.
Foreign exchange risk control refers to various behaviors that reduce risk costs by reducing the probability of risk loss and the degree of risk loss. Usually, behaviors to reduce the probability of loss are called risk prevention measures, and behaviors to reduce the degree of losses are called risk reduction measures. Investors can summarize relevant experience in the actual foreign exchange investment and transaction process and formulate a set of risk management plans suitable for their own operating habits in order to achieve twice the result with half the effort.
For beginners, it is an indisputable fact that they have disadvantages in their own trading experience. Before starting foreign exchange trading, they should develop the habit of learning foreign exchange trading knowledge. From the perspective of a foreign exchange trader, JRFX shares what beginners should pay attention to . Trading skills, but in the end all skills must be implemented in the real trading process to be effective. Only in this way can it really help to improve the final effect of foreign exchange investment!
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