Introduction to foreign exchange investment teaching: what is foreign exchange? How to make money by speculating in foreign exchange? Several ways to invest in foreign exchange

　　What is Forex?

　　For example,if you want to travel to the United States,you need to go to the bank to exchange Taiwan dollars against US dollars before traveling.Simply put,in addition to Taiwan dollar,other currencies are called foreign exchange.The foreign exchange transaction is the exchange of currency-the currency of country A is converted into the currency of country B according to a certain ratio.

　　How to make money by speculating foreign exchange?

　　Foreign exchange speculation is to make money by using the floating difference between the exchange rates of various countries.In the context of global economic integration,due to the continuous changes in various economic,military and geopolitical factors of various countries,the value of each country's currency also changes,resulting in fluctuations in the exchange rates between currencies of different countries.Sell high and buy low forex market.

　　Now suppose that 1 US dollar was equal to 26 Taiwan dollars a year ago;

　　Xiao Ming exchanged 2,600 Taiwan dollars for 100 US dollars;

　　Suppose the US dollar appreciates one year later,1 US dollar=28 Taiwan dollars;

　　Then the 100 US dollars that Xiao Ming bought a year ago can now be converted into 2,800 Taiwan dollars;

　　After all,Xiao Ming earned NT$200.

　　When you see this,you should find that if you compare the dollar to eggs,it should be said that the price of eggs has risen!However,the premise of making money in this process is the appreciation of the US dollar.If the US dollar depreciates during the year,then 1 US dollar may only be exchanged for 25 Taiwan dollars in a year,and the result is a loss,just like the price of eggs.

　　Following the above example,let’s first assume that Xiao Ming’s investment direction is correct,and he will continue to be bullish on the US dollar in the coming year.Now Xiao Ming is preparing to stock up on US dollars,but Xiao Ming’s Taiwan dollar is only enough to exchange for 100 US dollars,so how to make money through foreign exchange speculation What about more money?Maybe you thought of borrowing money.

　　Borrowing money is a good way to:

　　For example,Xiao Ming has 2,600 Taiwan dollars in his hand,and the exchange rate is 1:26,which can only be exchanged for 100 US dollars at present;

　　At this time,Xiaoming borrowed 26,000 Taiwan dollars from Xiaohong,which was converted into 1,000 US dollars,a total of 1,100 US dollars;

　　If the U.S.dollar continues to appreciate in the coming year,it is assumed that it appreciates to 1 U.S.dollar to 28 Taiwan dollars;

　　Then Xiaoming has 1100*28=30800 Taiwan dollars;

　　After deducting the principal of 2,600 Taiwan dollars,return the 26,000 Taiwan dollars borrowed by Xiaohong;

　　Xiao Ming also earned NT$2,200.

　　This is a theoretical example,because the annual interest rate of Xiaohong's funds is not calculated.In addition,there is a very critical issue that has not been considered,that is,risk control.

　　Assuming that the US dollar does not appreciate in the next year,what will Xiao Ming do if it depreciates to 1 US dollar to 25 Taiwan dollars?In the end,it turned into 27,500 Taiwan dollars.Not only did he lose his money,but Xiaohong didn't have enough money to pay it back.So as Xiaohong I don't lend you money?If you make money without me,if you lose it,you can’t afford it,what are you doing!

　　But the smart Xiaohong did not directly tell Xiaoming not to borrow,but was thinking hard:If he can control his own risks and charge a certain fee,then my money can also be loaned to Xiaoming.Speaking of raising funds,for me,there is no risk and I can earn some commissions,isn't it wonderful!

　　The next day Xiaohong came to Xiaoming and said that I want to lend you money,but there are certain additional conditions.First of all,you need to take out a part of the funds,this part is used as a deposit,and then I can take out a large part of the funds for you to use,but some expenses need to be directly deducted from this part of your funds,Xiao Ming has heard some doubts.

　　Let me give you an example:

　　You take out 1,000 Taiwan dollars;

　　I lend you 1W Taiwan dollars;

　　Regardless of whether you make a profit or a loss in the future,as long as you borrow my 1W yuan,I will first take 100 yuan from your 1,000 yuan as a commission;

　　That is,you will eventually have 10,900 Taiwan dollars to exchange for US dollars;

　　If the dollar falls,when your 900 yuan is lost;

　　I'm about to stop lending you 10,000 yuan;

　　But if you continue to replenish funds to make up for losses,1W yuan can still be used for you;

　　All in all,I can't lose to the part of my 1W dollars.

　　Of course,if the U.S.dollar rises to 1 U.S.dollar to 50 Taiwan dollars after a year,all the money you make will be yours,and I will not ask for any more.

　　Xiao Ming thought about it for a long time after listening to it.He felt that it was not bad,but he also felt that something was wrong,but he couldn't say it.In the end,he happily agreed to Xiaohong's request!

　　Later,due to the increase in market activity,Xiao Ming's transactions became more frequent,and the duration of each transaction changed from a year to a new transaction almost every day.And with the rise of other countries'economies,the variety of transactions has also begun to increase,not only the US dollar,but also the euro,British pound,Japanese yen and other currencies have also begun to trade.

　　With the US dollar as the central currency,not only can you do long,but you can also short other currencies.When the dollar is going to rise,buy dollars,and when the dollar is going to fall,sell dollars and exchange them for euros.Xiaoming is very busy!

　　At the same time,the loan rules between Xiaohong and Xiaoming are constantly changing.At first,it was agreed that each transaction was for one year,but then the frequency of transactions continued to increase.Xiaohong proposed that as long as a transaction ends,the borrowed money must be returned,and the borrowed money can continue to be used again,and a handling fee will be charged for each transaction..

　　Xiao Ming also made a request.It is okay to ask for a handling fee,but the money you borrowed from me is too small,which affects the efficiency of my profit.I need more funds.Xiaohong can think about it,and it won't lose my money anyway,but Jerry is worried that if the loan is too much,what if Xiaoming can't run away?

　　In order to keep her money,Xiaohong said:“It’s okay to increase the funds for you,but the funds used in the transaction must be placed with me.I still only charge the handling fee.The profit and loss are yours.When you need money.I can withdraw money from here.

　　Xiao Ming is no longer willing at this time,what if you take away my money,what if you don't give it to me if I make money?Xiaohong thinks it makes sense.When he was in a dilemma,Uncle Sam passed by.Uncle Sam is a well-known and well-known person in the local area.When he saw them arguing,he said to them,I heard your argument,and the problem can be solved like this:

　　Let Xiaohong pay a part of the security deposit here;

　　I gave him a license to hold other people's trading margins;

　　and keep your money in the bank;

　　I will supervise this fund account;

　　The money in it can only be used for trading,or you can deposit and withdraw by yourself,and cannot be used for other purposes;

　　If Xiaohong violates the rules,the security deposit will be deducted,or Xiaoming's losses will be compensated,and his license will be cancelled.

　　This proposal is supervised by a third party,which not only guarantees the interests of both parties,but also eliminates mutual doubts,and is quickly recognized by both parties.With the continuous optimization of the rules,Xiaoming and Xiaohong both got their own interests,and after seeing it,people around them gradually began to participate.

　　Some participate in the transaction,some provide funds,and gradually form a mature foreign exchange trading market.Through market competition,those who participate in the transaction obtain a better and better trading environment and lower transaction costs,and those who provide funds gradually form a platform.business,and acquired more customers.

　　Of course,the above stories are purely fictitious,mainly to illustrate the formation process of foreign exchange transactions and how to make money through foreign exchange speculation.Among them,Xiaohong's role is the current foreign exchange trading platform provider.The money she lent Xiaoming at first was the so-called leverage.The professional statement is to provide Xiaoming with liquidity.And the part of the funds that Xiao Ming took out himself is the margin,which is often referred to as foreign exchange margin trading.Uncle Sam is naturally the government financial regulatory agency in various countries.

　　The leverage provided by the platform in the current foreign exchange margin trading and the customer's margin are still somewhat different from those mentioned in the above example,because it is impossible for the current customer to negotiate with the platform to borrow how much money to trade when trading.Yes,it is necessary to establish a fixed trading pattern.

　　How many ways to invest in foreign exchange?

　　There are several ways to invest in foreign exchange:

　　1.Direct currency exchange,foreign currency fixed deposit

　　2.Foreign exchange margin trading

　　Foreign currency fixed deposit

　　If you are optimistic about the future trend of a certain currency,and the foreign currency has a higher interest rate,then you can buy it and hold it,collect interest,or wait until the exchange rate is satisfied before selling it.

　　The cost of this investment method is very low,that is,the exchange rate difference of the bank when exchanging money.

　　The advantage of this method is that the income is stable and the cost is low.The disadvantage is that the income is low,which is the general foreign currency fixed deposit.

　　Forex Margin Trading

　　You should be wise to find that if you only do foreign currency fixed deposits,if you don't have a large principal,the profit is very low.

　　Because generally the foreign exchange we can trade such as US dollar,Japanese yen,Australian dollar and Canadian dollar are currencies with relatively stable exchange rates,so the changes are relatively small.

　　So foreign exchange margin trading was born,

　　The advantage of this method is that the leverage is flexible,it can be used without large capital,and the cost is low.The disadvantage is that because of the leverage provided,both risks and benefits will be magnified at the same time,which requires careful operation.