Forex market is the largest financial market participants including banks , companies, financial
institutions and retail investors. The liquidity of the foreign exchange market is also the largest
financial market in the world. The average daily trading global foreign exchange market is about $ 4
trillion , far more than the sum of the stock and futures markets , and then in rapid growth . In such a
large volume of transactions, there is no individual agencies can be completely about the market trend ,
is the world's fairest and most transparent market. Investors can instantly currency trading based on
rapid changes in the market , it attracts a large number of investors to invest in the Forex market
5 days a week 24 hours trading
Up to one of the world's trading volume markets with high liquidity
Up to 400 times leveraged margin , improve capital utilization
Can hold or traded under different market trend can be traded
If a trader believes the euro / dollar will soon appreciate to 1.5000 dollar to buy 100 million euros. When the dollar rose to 1.5050 , the trader positions available after a gain of $ 5,000 .
The dollar bought 1.5000 to 1 million euros , equivalent to U.S. $ 1,500,000 .
When the dollar rose to 1.5050 , equivalent to U.S. $ 1,505,000 .
Bid-ask spread , ie a profit of $ 5,000 .
There are around 170 kinds of currency. However, the main trading activities are concentrated in six major currency pairs , which account for about two-thirds of the world's total foreign exchange turnover.
Major currency pairs include :
EUR USD ( 27% )
USDJPY ( 13% )
GBP USD ( 12% )
Australian dollar ( 6% )
USD CHF ( 5% )
USD CAD ( 4% )
In the foreign exchange market , price is always a currency relative to other currencies. Base currency is regarded as the parameters of the currency . For example, in EUR / USD quote , EUR is the base currency , prices represent the number of dollars it takes to buy one euro . Similarly, the dollar / yen , the U.S. dollar is the base currency , the dollar takes a number of representatives of the yen to buy $ 1 .
Bid and Ask
Bid refers to a particular currency market is willing to pay the price . Ask refers to the price the market is willing to sell .
For example , USD / CHF quote is 1.1650/1.653 , where the purchase price is 1.1650 , selling price is 1.1653 . Forex quotes are usually abbreviated to a smaller number of bits , such as the case quotes simplify 50/ 53 over the phone quote .
The difference between the trading price is called the spread.
"Points" ( price points ) represents the smallest unit of currency fluctuations on the . For most currencies, foreign exchange quote reservation after the decimal point four , except for the dollar / yen. 1:00 behalf of one of its rival currencies 10,000 points , or 0.0001. For example, if GBP / USD is quoted at 1.6319 , then rose to 1.6320 after a point . The quote USD / JPY remains only two decimal places ( 1 /100 or 0.01 ) .
Margin is calculated:
X 100 = Margin Level ((account balance + not / net realized gain or loss margin requirements for positions))
Example: Trader X has a balance of $ 10,000, +1,000 dollars in unrealized gains and losses, and its open positions including $ 300,000 of long positions against the Swiss franc against the Swiss franc and U.S. $ 200,000 of short positions, that the net open positions for the U.S. $ 100,000 against the Swiss franc. Well, he's margin level is: ((U.S. $ 10,000 + U.S. $ 1,000) / USD 3000) x 100% = 366.67% (margin level)