Basic teaching of foreign currency trading: who is suitable for investing and trading foreign currency? Master the time of foreign currency trading and you can also make money by speculating

　　Why do many financial experts and netizens suggest that petty bourgeoisie can buy foreign currency for investment?In addition to relying on foreign currency time deposit accounts to buy and sell foreign currencies,you can also earn foreign currency exchange rate spreads through foreign exchange margin dealers.How and when to buy foreign currencies?

　　What is foreign currency trading?

　　Foreign currency transactions can also be called foreign exchange transactions.Generally speaking,these two words have the same meaning,with only a slight difference:foreign currency refers to currencies,such as US dollars,euros,Japanese yen,Australian dollars,Taiwan dollars,etc.,The significance of foreign exchange is relatively wide,in addition to foreign currencies,it also includes some overseas bills,securities,etc.In other words,foreign currency trading is a type of foreign exchange trading,but foreign exchange trading does not only include foreign currency trading.

　　What about the interest rate on bank licenses?

　　I believe that many people have a question when they see the exchange rate board at the bank or the airport.How to distinguish the meaning of buying cash,selling cash,spot buying and spot selling?In fact,it is not difficult.These four prices are composed of two groups of concepts:cash vs spot and buy vs sell.

　　Cash vs Spot

　　The biggest difference between cash/gold and spot is whether there is actual cash exchange during the transaction.In other words,cash money is best understood,which refers to cash transactions.The two sides actually exchange the cash of the two countries,whether it is to exchange NT dollars for foreign currencies,or exchange foreign currencies for NT dollars,this exchange rate is used.The most common calculation is the exchange of foreign currency when going abroad;the spot transaction is a non-cash transaction,which does not involve any physical cash receipt and payment.It is simply sold and sold in the account.The spot exchange rate is applicable for Taiwan dollar to USD time deposit.Usually the spot exchange rate is better than the cash exchange rate,because cash transactions need to pay the bank some more banknote storage costs,and there is a risk of receiving counterfeit or damaged or lost banknotes,so the bank deducts the possible costs from the cash exchange rate first.It is one of the frequently heard exchange differences.

　　buy vs sell

　　After understanding the difference between cash and spot exchange rates,the next step is to confuse buying and selling.The common obstacle for everyone is:who buys and who sells?No matter where you see the exchange rate board,read it from the perspective of the other party,that is,from the perspective of the bank,not the first person.For example,if you want to sell foreign currency to a bank and exchange it for Taiwan dollars,you have to look at the buying exchange rate,because the bank bought the foreign currency in this transaction.

　　Seeing this,you may have questions again,so if you want to exchange foreign currency,should you choose cash transaction or spot transaction?It is generally recommended to choose the latter,that is,spot transactions.why?Very simple,there are three advantages:

　　1.The exchange rate is better

　　2.You don’t have to go to the counter in person

　　3.No need to actually hold foreign currency

　　Who is suitable for trading and investing in foreign currency?

　　There are more than 200 countries in the world,and there are more than 100 types of currencies.The strength of foreign currencies represents a country's economic growth and political stability.If you want to buy and sell foreign currencies,in addition to understanding the political and economic situation of various countries,you also need to understand many technical indicators.

　　Generally,there are several types of foreign currencies that you choose to invest in:US dollars,Euros,Australian dollars,New Zealand dollars,Japanese dollars,and South African dollars.why?Because the global liquidity is not too high,or the interest rate is too low,and almost no money can be made.

　　Among the above six foreign currencies,the US dollar and the euro are the most frequently traded foreign currencies.Apart from the US dollar,which is less likely to be deliberately controlled by the government,there are also the most commodities priced in US dollars.

　　As for the reasons for buying and selling foreign currencies,there are basically only three reasons:

　　Travel abroad

　　Many people only think of exchanging foreign currency when they go abroad.At this time,they may not encounter a good price.It is best to prepare first.If you already have the habit of saving,you can convert Taiwan dollars into foreign currency savings every month in a fixed-term investment fund,so that you don’t need to prepare extra money when you go abroad,and you can use it as an investment even if you don’t go abroad.

　　hedging

　　The value of a currency is not fixed and tends to fluctuate in response to political turmoil in the world or changes in the policies of a country's central bank.When you smell that unstable situation is about to happen and you expect that the policies of other countries may lead to the devaluation of the Taiwan dollar,then it is the best way to hedge and preserve the value of the Taiwan dollar by exchanging it for other high-value currencies/gold.

　　It is recommended to go to the bank to open a foreign currency time deposit account and purchase foreign currency at the spot exchange rate.Because in terms of bank quotations,the spot exchange rate will be much more favorable than the cash exchange rate.In addition,the bank will also provide a higher interest rate(2-3%)for foreign currency time deposits,which is much higher than Taiwan dollar time deposits,killing two birds with one stone.

　　As investment in foreign currencies fluctuates greatly,it is easy to lose the principal if the foreign currency trend is judged incorrectly.Therefore,the deposit period of the fixed deposit should not be too long.It is not a dilemma to cancel the contract,nor to wait for the expiration.Although the interest rate must be lower than the annual fixed deposit,it is more important to earn the exchange rate difference.The interest rate of the deposit for one year is at most 0.1%,0.2%,and the exchange rate may be 10%worse than 1 yuan.

　　earn the spread

　　For those who are new to foreign currency investment or have fixed foreign currency needs,they can buy foreign currency fixed deposits in small amounts and gradually become familiar with the characteristics of foreign exchange fluctuations,and then gradually adjust their investment positions according to their personal asset planning and investment attributes.

　　Because want to rely on foreign exchange to earn the spread requires frequent trading,whether it is cash or spot exchange rate is too expensive,so a more suitable way is through a foreign exchange broker.This type of trading concept is very similar to futures,and investors can freely choose suitable leverage for trading.Due to the relatively large leverage and volatility,newcomers to foreign exchange investment must first understand the basic concepts before doing operations.

　　Foreign currency fixed deposit is the investment method that the general public has the lowest threshold for participating in the foreign exchange market and is also the most popular investment method.However,once the foreign currency depreciates,if you want to convert the principal back to Taiwan dollars,you will lose money.Due to the cyclical nature of currencies,it is unlikely that the currencies of major countries will experience an endless downward trend.Therefore,it is possible to see which foreign currencies are at a relatively low point from a longer-term perspective to determine which foreign currencies are the most cost-effective to buy now..Here are a few tips for foreign currency trading for your reference:

　　1.Buy/sell in batches to diversify investment risks

　　2.Make good use of online currency exchange,network and bank app transactions at any time

　　3.Use the bank APP to automatically notify the quotation,and take the initiative to remind when the exchange rate reaches the high and low points,and buy on dips

　　Buying and selling foreign currency depends on the exchange rate in addition to the interest rate

　　Many foreign currency investors believe that the foreign currency interest rate is the most important factor to consider.Yes,the interest rate is indeed the primary indicator for choosing a foreign currency fixed deposit,but don’t forget that the exchange rate risk is also the key!As a result of blindly pursuing high foreign currency interest rates,it may be affected by the fluctuation of foreign currency exchange rates and reduce the original interest rate income,resulting in a profit margin,but a larger exchange rate loss.

　　Since the trend of the exchange rate cannot be accurately predicted,it is recommended that investors check their foreign currency assets on a monthly basis,not only to do a good job in risk management,but also to maintain the concept of decentralized allocation,and to use the regular fixed exchange rate function to balance the cost of foreign currency and reduce the exchange rate.Fluctuation risk makes foreign currency trading easily a part of asset allocation.In fact,as long as you master foreign currency trading time,you can also make money by buying and selling foreign currency and investing in foreign currency!