In recent years, with the improvement of economic level and the change of consumption concept, more and more people start to pay attention to investment and financial management. Foreign exchange trading has been favored by more investors due to its characteristics of fairness, justice, market transparency and equal opportunity. However, the popularity of foreign exchange trading technology has not been perfected in China, so many investors who want to enter the foreign exchange field have no way to start.
But now the Internet is so developed, so many foreign exchange speculators think of learning on the Internet, today Xiaobian will give those who want to enter the foreign exchange market beginners some enlightenment and summarize their own some foreign exchange trading strategies.
For someone new to foreign exchange, there is no way to deal with the different currencies in the market.
What currencies are available in the foreign exchange market and how should a novice choose them?
The most commonly traded currency in the foreign exchange market is called “major currency”. Most currencies are traded relative to the US dollar (USD), and it is also the currency with the highest transaction frequency.
The other seven frequently traded currency pairs are EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD and NZD/USD.
These seven major currencies account for 90 per cent of the global forex market.
1. Classification of Currency pairs Main trading currency pairs can be divided into: safe haven currency: US dollar, Japanese yen, Swiss franc Commodity currency: Australian dollar, Canadian dollar, New Zealand dollar Risk currency: Euro, pound sterling High interest currency:
Hedge currencies, also known as hedge currencies, are not susceptible to political, war, market fluctuations and other factors to avoid the above risks to the greatest extent.
Although the safe-haven currency maximizes the risk of devaluation, it does not mean that it will never depreciate.
The market price of any currency fluctuates.
The conventional safe haven is the Swiss franc.
Sometimes, other currencies, such as US dollar and Japanese yen, also act as hedge currencies, because Japanese yen is a low-interest currency. Whenever a country’s economy shrinks, it will rely on interest rate cut to stimulate the economy, which will lead to relatively large fluctuations in the exchange rate and increase the risk of the holders.
And because the yen has kept interest rates low for so long, there is no way down.
In times of economic crisis, other countries’ currencies may cut interest rates or depreciate, but the yen is unlikely to cut interest rates, so the yen is a safe haven.
02 Commodity currency Commodity currency refers to the Australian dollar, Canadian dollar and New Zealand dollar, which depend on resources and are closely related to the commodity resources produced by their countries.
Australia, Canada and New Zealand are rich in coal, iron ore and oil, so you will find that when mineral prices and oil prices strengthen, the Australian and Canadian dollars will also strengthen.
Commodity currencies tend to be the first to strengthen when the economy recovers, because once the economy recovers, the demand for commodities will increase, thus driving the economy of commodity exporting countries. Commodity currencies tend to be the first to raise interest rates, such as the Australian dollar and the Canadian dollar this time.
How to Choose a currency pair 01 Choose Foreign Exchange Trading according to trading hours One of the features of trading is 24 hours a day, 5 days a week.
As a result, trading hours can cover different time zones around the world.
Taking China’s time zone as a reference, we divide the foreign exchange trading period into four parts and select the layout of currency pairs in different periods by analyzing them.
The first paragraph (8:00-12:00) is a light Asian market with a range of 20 to 40 points. Watch the performance of Asian currencies such as the yen.
The second segment in the afternoon (14:00-18:00) belongs to the morning market of Europe, the market amplitude is medium, usually 40-80 points, can pay attention to European currencies, Sterling, euro, etc.
Fundamentals can be focused on influential data disclosure in European countries, generally when major economic data or political news emerge, the market is more volatile.
18:00 to 20:00 in the evening for the European lunch break and the eve of the opening of the United States, the market is relatively light, it is recommended to hold a wait-and-see attitude, wait for the opening of the United States to operate, because the market may be affected by the news surface of the United States and turn.
The third period (20:00 to 24:00) is the morning trading in the United States and the afternoon trading in London. During this period when the two major trading markets coincide, the European and American currencies fluctuate the most strongly, with the amplitude reaching 50-120 points (all non-American currencies have a large amplitude, such as the British pound), which provides investors with greater profit opportunities.
The release of influential data in the US, in particular, will cause the market volatility.
The fourth segment late at night (00:00-2:30) is the afternoon trading in the United States, a small correction to the overreaction of the third segment, usually a range of 20-40 points.
At this time, the market has been out of the larger market in the United States, but the data on the market impact is still a continuation or on the previous excessive violent market technical adjustment.
For beginners in foreign exchange, the best trading options are the major currency pairs.
These currencies have strong liquidity, small spread and obvious trading signals. Moreover, the strategies developed for these currency pairs are relatively mature. Novices can get more references in trading, which is very conducive to improving profit level with limited costs.
At the same time, intraday or ultra-short traders need a variety with large intraday price fluctuations, so major currency pairs are an ideal choice.
Experienced traders are more suited to trading crosses, which are currency pairs that do not include the US dollar, such as sterling/yen, sterling/AUD and AUD/JPY.
Cross currency pairs are usually highly volatile, and their trading characteristics require in-depth analysis and judgment to predict their future market trends, so the cross is usually favored by trend traders.
Aggressive traders prefer the currencies of emerging economies.
These currencies have small trading volume, low liquidity and large spread, and are affected by the market quickly, so the fluctuation range is large.
Although these currencies are expensive and difficult to trade, the trading opportunities and profit margins are considerable, making them popular with experienced aggressive traders.
Three, what are the foreign exchange skills?
What are the money making techniques of forex trading?
Speculation in foreign exchange needs to be judged by various factors.
But in general, foreign exchange skills are nothing more than the following aspects, Xiaobian summed up the following skills: 1, foreign exchange risk and market potential assessment.
In addition to having a rational sense of one’s potential, one must also consider the question of risk: what is an acceptable loss if one loses something, and the possibility of re-entering the foreign exchange market must be guaranteed.
Snap out of a loss: There are two main reasons to close a trade. One is if something that was supposed to happen doesn’t happen;
Second, the price reached the predetermined stop loss level.
No matter how correct the expectation is, if it happens, go out immediately.
2. How to manage the risk of foreign exchange speculation.
¢Ù Measure risk.
It is not enough to have the risk awareness of foreign exchange, but also the psychological ability to bear risks.
¢Û How a deal is set up in the first place is not the key to winning or losing.
¢Ü Don’t try to hedge foreign exchange.
The way to minimize the damage is to show up in time.
3. Foreign exchange trading, step by step trading should be a step by step, not a move to win or lose.
Sometimes trading is not for you, and not trading is a sign of discipline.
It’s not too late to get into the market when conditions are right.
4. Correctly grasp the adverse situation of the market and the loss of the position, which is the first warning of the appearance;
The second is tolerance for pain, tolerance for loss.
Foreign exchange speculation is a kind of assessment of judgment and comprehensive quality.
Investors should have a full understanding and preparation of their own strength before making trading decisions, not blindly, not to follow blindly.
