Although there is no forex trading display, everyone knows that there are definitely more people buying and selling mainstream currencies. People who are accustomed to looking at candlestick charts can also see that the candlestick charts of mainstream currencies are relatively complete, and it is as uncomfortable that the candlesticks of niche currency pairs are all burrs. So for beginners, you only need to choose the mainstream currency pair. The small ones have more time to consolidate because of the little traffic. After all, various indicators are prone to errors during consolidation.
What is foreign exchange?
What is foreign exchange trading? And how it works!
Approximately 13.9 million traders around the world conduct currency transactions at the same time as we mentioned before, the vast liquidity of the foreign exchange market.
This considerable liquidity means that traders enter the market at any time to trade, and liquidity has a considerable influence on traders. If the liquidity is sufficient, the transaction cost difference may be reduced. This also means that the market is easily susceptible to market manipulation! If traders carry out huge transactions in low-liquid markets, this will have a significant impact on prices!
Now, the foreign exchange market includes all currencies in the world and is open 24 hours a day from Monday to Friday. The transactions completed on these currencies are called OTC (Over The Counter). This means that there is no physical exchange like stocks. It is actually a global network in which financial institutions and banks oversee the market rather than a network of central exchanges like the New York Stock Exchange.
As individual traders, most of them will be classified as “retail traders.” However, the largest part of foreign exchange transactions is actually carried out by “institutional dealers” of banks, funds, and large companies. They do not necessarily have to actually buy or sell currencies but rather focus on price movements or hedge against impending changes in exchange rates.
What is individual firm forex trading?
Personal real forex trading refers to transactions between a freely convertible foreign exchange (or foreign currencies) carried out by individual customers in banks. Personal foreign exchange transactions are generally divided into firm orders and virtual orders.
At present, according to relevant national policies and regulations, only real foreign exchange trading can be carried out, but virtual foreign exchange trading cannot be carried out. The following questions refer to individual real foreign exchange trading.
What is the difference between personal real foreign exchange trading and virtual foreign exchange trading?
Personal real forex trading, commonly known as “Foreign Exchange Treasure”, refers to non-overdraftable, freely convertible foreign exchange (or foreign currency) transactions conducted by individual customers in banks through counter service personnel or other electronic financial services. Personal virtual foreign exchange trading refers to a foreign exchange (or foreign currency) transaction that can be magnified several times after an individual has paid a certain margin in the bank.
What is the difference between the personal firm foreign exchange trading business and the traditional savings business?
The traditional savings business is a deposit and withdrawal business to earn interest. Personal real foreign exchange trading is buying and selling a business whose main purpose is to earn exchange rate differences. At the same time, customers can also use this business to convert their foreign currencies into foreign currencies with more appreciation potential or higher interest rates to earn Exchange rate fluctuations or higher interest income.
How can individual real foreign exchange trading help the general public?
Personal real foreign exchange trading is by far one of the most effective financial instruments for maintaining and increasing the value of personal foreign exchange assets. Since individual investors cannot invest in the B-share market and cannot exchange foreign exchange for RMB, personal real foreign exchange transactions can meet the purpose of maintaining and increasing the value of foreign exchange assets of the general public. Therefore, it has become another hot spot for financial investment after stocks and bonds.
Who can conduct personal real foreign exchange trading?
All domestic resident individuals who have valid identity documents and full capacity for civil conduct and have a certain amount of foreign exchange (or foreign currency) can conduct personal real foreign exchange transactions.
What are the tradable currencies for personal foreign exchange trading?
At present, the types of foreign exchange (or foreign currency) that the Bank of China has opened for individual real foreign exchange transactions are slightly different but basically include U.S. dollars, Euros, Japanese yen, British pounds, Swiss francs, Hong Kong dollars, and Australia. Major currencies such as yuan and some branches also include Canadian dollars, Dutch guilders, French francs, German marks, Belgian francs, Singapore dollars, and others.
Which currencies can be traded in personal forex trading?
Customers can conduct the following two types of transactions through personal firm foreign exchange transactions: 1. U.S. dollar to euro, U.S. dollar to yen, pound to U.S. dollar, U.S. dollar to Swiss franc, U.S. dollar to Hong Kong dollar, Australian dollar to U.S. dollar (some branches also pay It can be exchanged between the U.S. dollar and the Canadian dollar, the U.S. dollar and the Dutch guilder, the U.S. dollar and the French franc, the U.S. dollar and the German mark, the U.S. dollar and the Belgian franc, and the U.S. dollar and the Singapore dollar). 2. Transactions between the above non-US dollar currencies, such as the British pound against the Japanese yen, the Australian dollar against the Japanese yen, etc., are referred to as cross trading in the international market.
Can personal foreign exchange transactions be conducted in currencies other than tradable currencies?
No. If customers need to exchange currencies other than the currency of personal foreign exchange trading, the personal foreign exchange trading counter is not accepted. Customers can go to the bank’s exchange counter to cross-calculate through the exchange rate between foreign currency and RMB.
What currency is the base currency in personal foreign exchange trading?
In individual real foreign exchange trading, the sterling, Australian dollar, and euro are quoted against the U.S. dollar. The British pound, Australian dollar, and the euro are the base currencies. The other currencies are quoted against the U.S. dollar. The U.S. dollar is the base currency.
Can the client conduct personal real foreign exchange trading if he only has RMB and no foreign currency in his hand?
No. Because personal real foreign exchange transactions are transactions between foreign currencies and foreign currencies, and the renminbi is not a freely convertible currency, the renminbi cannot be used for personal real foreign exchange transactions.
Do I need to pay a single handling fee for personal foreign exchange trading? In what form are bank charges reflected?
Personal foreign exchange trading business does not require a single handling fee. Bank fees are reflected in the difference in buying and selling prices.
How to generate the quotation for individual firm layman’s buying and selling?
The bank quotes prices by international foreign exchange market conditions and international practices. The price of personal foreign exchange transactions is composed of two parts: the benchmark price and the bid-ask spread. The purchase price is the benchmark price minus the bid-ask spread, and the selling price is the benchmark price plus the bid-ask spread. Due to various international political and economic factors and various emergencies, the exchange rate is often in violent fluctuations. Therefore, customers should be fully aware of the coexistence of risks and opportunities when conducting personal real foreign exchange transactions.
Is foreign currency cash the same as cash exchange?
Answer: Not the same. Cash usually refers to banknotes and coins in foreign currencies or deposits generated by depositing banknotes and coins into banks. Cash transfer mainly refers to bank deposits obtained and formed by international settlement methods such as checks, remittances, and collections.
Why is there any difference between the price of cash and foreign exchange for personal foreign exchange transactions? Do cash and cash exchanges use the same price in individual real foreign exchange transactions?
Foreign currency banknotes can only be transported abroad to pay, and the bank that transports banknotes needs to bear the freight, insurance premiums, interest, and other costs, so banks generally have to make a certain difference in the price of personal foreign exchange transactions. At present, to provide the greatest discount to the general residents for individual real foreign exchange transactions, the Bank of China has the same price for individual real foreign exchange transactions, except that individual branches have cash and foreign exchange prices for individual currencies.
Can cash and cash exchange be exchanged through personal foreign exchange trading business?
According to the relevant regulations of the state’s foreign exchange management, cash cannot be exchanged for cash at will. Personal foreign exchange trading business is based on changing banknotes into banknotes and foreign exchange into foreign exchange.