What is foreign exchange trading

Broadly speaking, foreign exchange transactions refer to the exchange of one country's currency with another country's currency. Foreign exchange margin trading (hereinafter referred to as foreign exchange trading) refers to signing a contract with a designated investment institution, opening a trust investment account, depositing a sum of funds (margin) as collateral, and setting a credit operation limit by the investment institution (or brokerage firm). Traders can freely buy and sell spot foreign exchange or foreign exchange futures of the same value within the limit. Most foreign exchange brokers provide spot foreign exchange trading with margin for individual traders.

How to conduct foreign exchange transactions

Most individual traders engage in foreign exchange trading through foreign exchange brokers. Before starting foreign exchange trading, traders need to choose a reliable broker to register an account. After registering the account, the deposit will be deposited into the account. After downloading the trading platform supported by the broker, traders can proceed with foreign exchange trading.

Can foreign exchange trading be profitable

In foreign exchange trading, traders face significant loss risks while enjoying the high returns brought by margin trading. Foreign exchange trading depends on the trader's mentality, strategy, experience, and market conditions.

For example, if a trader has a margin of $2000 in their account and uses 100 times leverage, they need a margin of $1184.6 to conduct a standard euro to dollar trade. If you buy a hand of EUR/USD at 1.1846, and the USD rises to 1.1946, then the trader's return=(1.1946-1.1846) × 10=1000 US dollars; If the exchange rate drops to 1.1746, the trader's loss=(1.1746-1.1846) × 10=-1000 US dollars. The calculation formula is: (closing price - opening price) × The point value, positive or negative, represents profit or loss, and the point value of each euro against the US dollar is a fixed value of $10