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What is foreign exchange trading?
Foreign exchange or "foreign exchange market" is the world's largest financial market, with an average daily transaction volume of approximately3Trillion US dollars. Foreign exchange trading involves simultaneously buying one currency and selling another currency. The price of money is fluctuating, depending on the relationship between supply and demand. Foreign exchange transactions are always paired, such as euros/USD or AUD/USD.
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How do I make money through foreign exchange trading?
Foreign exchange trading involves buying lower, selling higher or selling higher, and buying back lower. Leveraging means that you can deposit a small amount of money to obtain the same purchasing power as when you were completely buying and selling currency.
For example,Marytake5,000The US dollar is deposited into her foreign exchange trading account, and the leverage ratio ratio of her account is designated as1:100。 Due to leverage,MarysIn her5,000Buying electricity on a US dollar deposit has become500,000USD. Mary decided to0.99802Buying at a price of0.1Hand Australian Dollar/USD face value,3Tian Tian AUD/The price in US dollars is1.04069Mary decided to close her position. Mary's profit is calculated as(1.04069 - 0.99802)426Point. As Mary opens0.1The position of the hand Mary profits426USD or per point1USD.
Of course, if the Australian dollar/The US dollar is below its opening price against Mary0.97802Mary will have a trading loss of(0.99802 - 0.95542)426Point. Due to Mary's position size being0.1Hand, Mary will lose426USD or per point1USD. -
Is the foreign exchange market a fair market?
Foreign exchange is considered one of the most fair and transparent markets in the world, mainly due to the large number of market participants, transaction size, and volume. No country or bank can fully control the direction of currency.
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Where is the foreign exchange market?
The foreign exchange market does not have a central position, unlike the stock and futures markets. Foreign exchange trading is not traded on exchanges, but is traded off the exchange(OTC)There are no central exchanges or private investors between trading, banks, governments, and hedge funds. Foreign exchange market weekly5Days, every day24Hours open.
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Who are the main participants in the foreign exchange market?
The main participants in the foreign exchange market are central banks, commercial banks, and investment banks, but in recent years, the internet accessibility of the foreign exchange market has increased, leading to an increase in the number of participants. These days, participants also include large multinational corporations, fund managers, registered traders, currency brokers, and private investors.
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What is the opening and closing time of the foreign exchange market?
The foreign exchange market is24In the hourly market, foreign exchange trading begins daily in Wellington, New Zealand, and begins globally on business days in each financial center. The main global financial centers where most foreign exchange transactions occur are Tokyo, London, and New York. Foreign Exchange Market Sunday Night10Opening at midnight (Greenwich Mean Time), Friday evening10Ends at point (Greenwich Mean Time).
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Which are the most popular foreign exchange currencies/Product?
The most liquid currency pair comes from politically stable governments and highly respected central banks. The most popular currency pairs are paired with the US dollar, which are referred to as the "major currencies" and account for approximately85%。 The most common trading pair is the euro/USD, USD/JPY, GBP/USD, AUD/USD, USD/Swiss Franc and US Dollar/Canadian dollars.
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What are the reasons for exchange rate fluctuations?
There are various fundamental and technical aspects that may lead to exchange rate fluctuations. The most significant impacts include interest rates, inflation, and political stability. Sometimes the government may purchase or sell a currency in order to affect its value and have a broader impact on the country's economy. This is known as central bank intervention and may have a significant impact on the value of money. Given the size and diversity of participants, no factor can affect the foreign exchange market for any considerable period of time.
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How do I control or manage risks during trading?
Various risk management strategies for foreign exchange traders. The most common form of risk management is the use of stop loss and limit price orders. Stop loss orders can limit any potential losses. The working method of limit orders is roughly similar to that of stop loss orders, but it allows us to migrate to the highest price.
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Is trading in the foreign exchange market very expensive?
Forex trading has never been so cheap and easier to obtain. Traders can now trade through institutional level pricing, with deposits as low as200USD, leverage ratio ratio up to1:1000。 However, it is important to remember that although leveraged trading can maximize profits, it can also amplify losses.
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What is a point difference?
In foreign exchange, the price difference isBIDandASKThe difference between prices. If it is multiple orders, you will submit a purchase order andASKTrading at a price, if you plan to "short", you will submit a sell order andBIDPrice trading.
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What is the minimum number of hands I can trade??
IC Markets supportMicroBatch transactions. MetaTrader 4The number of mini hands in is represented as0.01, equivalent to1000Basic currency units.
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How to trade on the internet?
On the world's most popular trading platformMetaTrader 4Trading through the internet is very simple. After downloading and installing the trading platform, simply log in and double-click on the tool in the market observation screen. Enter the desired transaction volume in the displayed order, then click on "buy market" or "sell market", and then process the market to execute the order. As long as you have sufficient funds in your trading account,MetaTrader 4The platform will automatically fill in your order. Your open position will appear in the trading terminal with profit/Losses and margin will be calculated in real-time based on price changes.
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What is a margin and how to calculate it?
The deposit is the amount required to open a position in your account. Margin is calculated based on the current price of the base currency against the US dollar, the size of the position (trading volume), and the leverage applied to your trading account. If you do not have enough available funds, you will not be able to open positions on the trading platform. If you wish to open an additional position, the available margin amount displayed on the trading platform is the amount you can use.
The margin is calculated using the following formula:
Margin requirements=(Current market pricexTurnover/Account leverage
In practice, this will be calculated as follows:
If the1.35645The current market price of is in euros/USD opening0.1(10000)And your account has a leverage ratio of1:400You will calculate the required deposit as follows:
(1.35645 x 10000)/ 400 = $ 33.91
In this example, the margin for this position is33.91USD, therefore in order to open a position of this size, at least you need to33.91Available margin in USD.
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What happens if there is no available margin in my account?
If there is no available margin in your account, your position will be forcibly terminated. In some cases, if the loss of the stop loss position exceeds your account balance, your account balance may become negative.