What is the foreign exchange market?
The foreign exchange market, also known as FOREX or FX, is a global currency trading market. With a daily transaction volume of more than 5.3 trillion U.S. dollars, it is the world's largest and most transparent and fair market. Forex trading is very simple. Whether you convert 100 Euros into U.S. dollars at the airport, or convert 100 million U.S. dollars into Japanese yen between different banks, these are actually foreign exchange transactions. The range of traders involved in the foreign exchange market is very wide, from managing billions of huge financial institutions to individuals who trade hundreds of dollars.
The trading volume, momentum, and opportunities in the foreign exchange market are huge. It is the closest to the perfect market: all traders from individuals to big banks trade under the same terms and requirements, obtain the same information, and the market provides unlimited liquidity, you can continue to buy and sell transactions, there is no threshold limit . From 5:00 p.m. EST on Sunday to 5:00 p.m. EST on Friday, the foreign exchange market operates 24 hours a day. Trading starts from the beginning every day. As the earth turns, the business day of every financial center in the world will start in turn, from Tokyo to London to New York. Unlike other financial markets, during the normal foreign exchange market opening hours, whether it is day or night, foreign exchange traders can respond to market fluctuations at any time.
What is foreign exchange trading?
Foreign exchange transactions are the exchange of one currency with another currency through changes in the exchange rate to earn the difference.
For example (EUR/USD) Euro to U.S. dollar or (USD/JPY) U.S. dollar to Japanese yen.
Here is an example of foreign exchange transactions. If you decide to buy 1000 euros in US dollars. The exchange rate of this currency pair EUR/USD at the moment of your purchase is 1.4500, so you need to pay 1450 US dollars.
Later, when you are ready to sell euros back to U.S. dollars, the EUR/USD exchange rate is 1.5500. At this point, you can get 1550 US dollars by selling your 1,000 euros. You started with $1450 in funds, and now you have $1550, so you make a profit of $100.
Or, you can sell Euros to buy U.S. dollars at an exchange rate of 1.3500. You can sell 1,000 Euros and get 1,350 U.S. dollars. The original price was US$1,450 and the current price was US$1,350. In this case, the loss was US$100.
This example illustrates how to make or lose money in the foreign exchange market.
Advantages of foreign exchange trading
1: Flexible leverage options, KENKE CAPITAL provides a default leverage ratio of 1:200 times, and a maximum leverage ratio of 1:1000 times.
2: 24-hour uninterrupted trading, no matter where you are or in any time period, you can trade through the mobile terminal of your computer or mobile phone.
3: T+0 trading mechanism, two-way trading, you can buy or sell, buy up or down at any time.
4: High liquidity, it only takes about 200 milliseconds from order execution to transaction.
5: Fairness and transparency. Forex trading is the world's largest trading market. Prices are transparent and open, and there is no distinction between dealers and individuals.
6: The minimum trade is 0.01 hand, and you can trade at least 0.01 hand, and there is no limit to the amount of increase or gap.
7: Convenient trading method, in addition to manual trading, you can also use EA programs or smart robots to trade.
The risks of foreign exchange transactions
Any over-the-counter foreign exchange transaction has certain risks, including (and not limited to) leverage, credit reliability, limited legal protection, and market turbulence factors that may greatly affect the price or transaction volume of the currency pair. The magnification of the leverage ratio is two-way. On the one hand, investors’ trading quotas are increased and investment returns are doubled; on the other hand, risks are also added, which may cause investors to face greater losses. Therefore, before deciding to participate in foreign exchange transactions, please carefully consider your investment objectives, experience level and risk tolerance. If you cannot afford the loss, please do not invest rashly.