First, it is the place of trading.
It is the largest market in the world.
Some participants in the market only convert their money into certain foreign currencies.
For example, multinational companies sell products in different countries and have to pay wages and other expenses to the place of sale.
However, most participants in the foreign exchange market are currency traders who speculate on trends, just as those who speculate on the movements of stock prices.
Currency traders try to profit from every tiny move in the exchange rate.
Second, there is little “inside information” in the foreign exchange market.
Exchange rate fluctuations are usually determined by actual financial flows and expectations about global macroeconomic conditions.
Important information will be made public.
So in theory, anyone in the world could have access to the same information at the same time.
One currency is traded in another currency.
Thus, each currency pair forms a product, usually labeled XXXYYY.
YYY, a three-letter international code for a currency whose price is expressed as the price of XXX.
For example, the price of EUR/USD is expressed as.
One euro = $1.2045.
4. Unlike stock markets and futures markets, the foreign exchange market is an over-the-counter (OTC) interbank market, which means there is no single unified place where currency pairs are traded.
Markets operate 24 hours a day between individuals and brokers, between brokers and banks, and between banks.
When European hours end, Asian or American hours will open, so all currencies in the world can be traded continuously.
Instead of waiting for the market to open, traders can react when the news is announced.
5. Like any market, there is/and (the difference between the buy price and the sell price).
The difference between the price at which a market maker sells a master currency pair to a large customer and the price at which it buys it in the same market from a customer of the same size is very small, usually only 1 or 2 points.
Suppose the exchange rate EUR/USD is 1.4238, and the dot refers to the last digit “8” after the decimal point.
Therefore, the bid/ask price on EUR/USD is likely to be 1.4238/1.4239.
Of course, this does not apply to retail customers.
Most individual currency speculators trade through a broker, who typically widens the spread to 3-20 points (so the quote in our example above might be 1.4237/1.4239 or 1.423/1.425).
Brokers often put up large deposits on behalf of clients so they can pay more to buy and sell spreads.
Because brokers are not regulated by the Securities and Exchange Commission in the United States (because they do not sell securities), they are not subject to the same uniform margin limits as the securities brokerage industry.
They usually do not charge interest on the margin.
However, since currency trades must be completed within 2 days, they need to “re-establish” opened positions (again charging the bid/ask spread).
Individual currency speculators can work during the day and trade at night to profit from the 24-hour operation of the foreign exchange market.
The dollar rose, gold fell sharply after hitting 1,820, and oil rose for a fifth straight day.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
