Forex Trading Course in Personal Skills 2 Forex Trading Course in Personal Skills 2 If the exchange rate of 100 yen Profit US $ 680.00 US $ 680.00 Profitability 680/92, 592.59 = 7.34% 0 680/1000 = 68% If the yen exchange rate fell 100 points Loss of US $ 680.00 US $ 680.00 Loss rate of 680/92, 592.59 = 7.34% 0 680/1000 = 68% Can be found from the table, actually buy real form of selling and margin trading in the amount of profits and losses is identical, the difference is that investors put into funds in the amount of the gap, actually sold to buy real into more than 90 thousand U.S. dollars to 12,500,000 yen trading, while the use of margin in the form of only a 1000 U.S. dollars, the amount of difference between the two inputs 90 times. Therefore, for investors to contract into a small, multi-output, more suitable for public investment, the smaller funds can win more profits. However, taking the form of margin trading of foreign exchange in particular should pay attention to the problem is that because the amount of margin is small, but Shi Ji leveraging of funding has is significant, the volatility of daily foreign exchange rate You Hentai if investors Panduan foreign exchange movements aspects errors, it is easy to create margin annihilated. Above table, for example, the same rate of loss of 100 points, investors in a 1000 U.S. dollars on the Kuidiao 680 dollars, if the yen continues to depreciate, investors did not take timely measures, should result in all paid with not only the margin, but may also be additional investment. Therefore, high-yield and high risk is equal, but the proper way, if investors, risk can be managed and controlled. Spot foreign exchange contracts, investors may also be considerable interest. Interest-bearing foreign exchange spot contract approach, not the actual amount of investment the investor, but rather to the contract amount. For example, investors put 10 thousand U.S. dollars for deposit, a total of five contracts to buy a pound, then the calculation of interest not by investors invested 10,000 U.S. dollars terms, but by 5 pounds worth of contracts per year, sterling value of the contract by number of contracts (62,500 pounds * 5), this way, the interest income is very substantial. Of course, if the exchange rate have declined, so, although investors took interest, how have arrived in the price changes can not Kuidiao loss. Integrated financial information does not mean the sale of any interest in foreign currency are to be received, only buy foreign currency with high interest rates have interest income, sell high interest rates not only failed to interest income in foreign currency, investors must also pay interest. As the national interest are regularly adjusted, therefore, different currencies in different periods of interest paid or received is not the same, investors should engage in foreign trade transactions of interest published by charging criteria. There are two formulas of interest, a direct price for foreign currency, like the Japanese yen, Swiss franc, and the other for indirect price of foreign currency, such as the euro, British pound, Australian dollar and so on. Yen, Swiss franc interest is calculated as: Contract Amount * 1 / market price of interest rate * days * / 360 * Number of contracts Euro, pound interest formula is: The market price of the contract amount * interest rate * days * / 360 * Number of contracts Contract method of spot foreign exchange trading, either in the low first buy, then sell when prices rise, you can sell at high prices before, and so the price drop before buying. Foreign exchange prices always rise or fall in waves of. This can buy first sell first method can not only profit in rising market, you can make money in the fall of the situation. If investors flexibility in the use of this method, whether a rising or falling market can have it both ways. So, investors how to calculate profits and losses of foreign exchange spot contracts do? There are three factors to consider. First, we must consider the foreign exchange rate changes. Investors can profit from exchange rate fluctuations in the spot foreign exchange contract that is the main way to invest in profit. How much profit or loss is calculated in points, points in fact the so-called exchange rate, say 1 dollar ￥ 130.25, ￥ 130.25 can be said to 13025 points, fell to 131.25 per day, that is down 100 points, Japan element at this price point, each point represents a 6.8 U.S. dollars. Japanese yen, British pound, Swiss franc and other currencies for each value of each point represents not the same. Spot foreign exchange trading in the contract, the more points earned the more profitable, pay fewer points the less loss. For example, investors in the 1.6000 price contract when buying a pound, when the pound rose to 1.7000, investors sell this contract, which earned ￡ 1,000 points, up to 6,250 dollars profit. When the other investors to buy sterling 1.7000, the pound fell to 1.6900, he immediately threw in the hands of the contract, then he just lost 100 points, that is paid with 625 U.S. dollars. Of course, the number of points earned and lost and how much profit and loss is directly proportional. Secondly, we must consider the interest expense and income. This article has been first described in foreign currency to buy high interest rates will be some interest, but the first to sell foreign currency by paying high interest rates of interest. If it is short-term investments, such as the end of the day of sale, or 12 days of the end, you do not consider the interest expense and income, because 12 days of interest expense and gains little, little effect on the profit or loss. In the medium and long-term investors, the question of interest is to be a part of students can not be ignored. For example, when the first investors in the sale price of ￡ 1.7000, a month later, still in this position ￡, if by selling sterling to pay an interest rate of 8%, monthly interest payments as high as 750 U.S. dollars. It is also a lot of expenses. Investment in the general population from the current situation, many investors see more on interest income, while ignoring the trend of foreign currency to foreign currency like to buy high interest rates, resulting in a loss to little more than, for example, when Sterling fell, investors bought a pound, even if a contract interest income 450 U.S. dollars per month, but down 500 pounds a month, paid with 3,125 in points on the dollar, interest revenues do not cover losses caused by sterling fell. Therefore, investors should give top priority to foreign exchange rate movements, while the interest income or expense on the second. Finally, we should consider the fee expenditures. Investors, foreign exchange sale and purchase agreements to finance the company through, so investors should be counted in this part of the expenses to cost. Fees charged by financial companies is based on the number of investors trading contracts, rather than how much profit or loss, therefore, is a fixed amount. The above three aspects form the calculation of spot foreign exchange contract gains and losses is calculated. Yen, Swiss franc profit and loss is calculated as: Contract Amount * (1 / offer price -1 / Bid Price) * Contract number - fee + / - Interest The euro, pound gain or loss is calculated as: Contract Amount * (selling price - purchase price) * number of contracts - fees + / - Interest Foreign exchange margin trading, as an investment tool in Europe and the United States, Japan, Hong Kong, Taiwan and other countries and regions is legal, traders and trade practices under government supervision. To learn more details, please see the section of the site deposit transactions. 2, foreign exchange futures Futures forex trading is the agreed date, in accordance with the exchange rate have been identified, with the dollar trading a certain amount of another currency. Futures trading spot foreign exchange trading and contracts have in common are different points. Spot foreign exchange contracts traded by banks or companies to conduct foreign exchange transactions, and futures foreign exchange trading is the futures market specifically. Currently, the world&#39;s futures markets are: the Chicago futures market, the New York Mercantile Exchange, the Sydney futures market, the Singapore futures market, futures market in London. Futures market at least two parts: First, market, and the other is a liquidation center. Futures of the buyer or seller in exchange transactions, the liquidation of its trading center will become the other, until the actual delivery futures contract up. Foreign exchange and foreign exchange futures contract has some connection, there are some differences, the following from the perspective of comparing the two, tell us about the specific mode of operation of foreign exchange futures. Foreign exchange futures contracts trading volume and spot foreign exchange transactions are alike. Forex trading is a futures contract, at least, the amount of each contract, and different currencies have different regulations, such as a contract for 62,500 pounds sterling, yen 12,500,00 yen, euro 125,000 euro. Foreign exchange futures contract delivery date, there are strict requirements that the spot foreign exchange contract transactions is not. Futures contract delivery date of the provisions of the year in March, June, September, December of the first 3 weeks of Wednesday. That same year, and only four contracts, delivery date, but other times can be traded, not delivery, if the delivery date was postponed a day banks are closed. All foreign exchange futures contract price is equal to the number one foreign currency expressed in dollars, so, in addition to sterling, the futures price of foreign exchange and foreign currency exchange rate of just each other reciprocal contracts, for example, in December futures price of 0.6200 Swiss francs, just as the countdown 1.6126. Futures trading and foreign exchange interest payments and income is not the issue, whether to buy or sell any foreign currency, investors are not of interest, of course, do not pay interest. Foreign exchange futures contracts trading methods and exactly the same spot foreign exchange, either to buy after the first sale, you can sell first and buy later, you can two-way choice. 3, the development of online foreign exchange trading Since 1997, with the development of the Internet, online foreign exchange margin trading has swept the world, become a popular way to foreign exchange transactions, not only have begun to use the inter-bank transactions online, more and more individuals are involved in the foreign exchange market through the Internet. The development of online foreign exchange trading, breaking the geographical limitations of the original must rely on local dealers to participate in foreign exchange transactions of individuals and small institutional investors, can be more convenient for foreign exchange investment. December 2000, the United States passed the &quot;Futures Modernization Act&quot;, the bill requires all foreign exchange dealers must be in the National Futures Association (NFA) and the U.S. Commodity Futures Trading Commission (CFTC) registered Futures Commission Merchant (FCM), and accept the daily supervision of these institutions, in the period are not eligible or has not been approved by the foreign exchange industry will be ordered to cease operation. The introduction of this bill, to make the online foreign exchange margin trading norms onto the development track. At present, he has passed the U.S. CFTC (Commodity Futures Trading Commission) foreign exchange dealers registered with (at the time has passed) FXCM, MGFG, GAINCAPITAL, CMS-FOREX, etc.. 4, foreign exchange market in China Past and Present 1992 -1 993 futures market in the blind development of the process, many foreign exchange dealers in Hong Kong to mainland China without the approval of the foreign exchange futures trading business, and attract a large number of domestic enterprises and individuals. As the vast majority of participants do not understand the domestic foreign exchange market and foreign exchange transactions, the blind leading the large area involved and a lot of losses, including a large number of state-owned enterprises. August 1994, China Securities Regulatory Commission and other four ministries jointly issued a document, a total ban on foreign exchange futures (margin). Since then, the management of the domestic foreign exchange margin trading has been negative, and cracking down attitude. The end of 1993, Bank of China began allowing domestic banks to launch a firm offer for the personal foreign exchange trading business. To 1999, with the stock market norms, stock trading, significantly reduced the profitability of space, some investors are beginning to enter the foreign exchange market, the domestic firm offer for sale of foreign exchange has become a new kind of investment into the stage of rapid development. According to CCTV, foreign exchange trading has become the largest outside investment than the stock market. Compared with the domestic stock market, foreign exchange market to regulate and much more mature foreign exchange market daily trading volume is about the domestic stock market trading volume of 1,000 times, so even though the trading rules do not fully comply with international practices, domestic banks operated individual or firm offer foreign exchange trading has attracted more and more participants. Overall, the overwhelming majority of foreign investors to participate in the domestic banking firm offer trading and margin trading, it is not yet open, and the country&#39;s exchange control policy, domestic investors still need to mature. Lesson Exchange Rate Analysis 1, Fundamental Analysis Purchasing power parity (PPP) | interest rate parity (IRP) | balance of payments models | Asset market model Money market based on two main analysis methods and technical analysis. Focus on fundamental analysis of financial, economic theory and political development, which determine the supply and demand factors. Technical analysis observe price and volume data to determine the trend of the data in the future. Technical analysis can be further divided into two main types: quantitative analysis: the use of various types of data attributes to help the estimated purchase over / sell the currency of the limits of ultra-; chart analysis: the use of lines and graphics to identify the currency composition of significant trends and models. Analysis and technical analysis based on the most obvious difference is the point: the basis of analysis of the reasons for market movement, while technical analysis studies the effect of market movements. When in another country&#39;s currency valuation of a country&#39;s currency, the basic analysis, including macroeconomic indicators, asset markets and political factors. Macroeconomic indicators include figures such as economic growth, the gross domestic product, interest rate, inflation rate, unemployment rate, money supply, foreign exchange reserves and productivity and other factors calculated. Asset markets including stocks, bonds and real estate. Political factors will affect the credibility of a government, social stability, climate and confidence. Sometimes, government intervention in currency markets to prevent the currency significantly deviate from the unsatisfactory level. Intervention in currency markets by the central bank implemented the foreign exchange market is usually a significant but temporary impact. Central bank money can be taken to another country unilaterally purchase / sell the national currency, or in combination with other central banks to intervene jointly in order to achieve more significant results. Alternatively, some countries manage to only hint or threat of intervention by issuing to achieve the purpose of currency value changes. The basic theory of fundamental analysis Purchasing power parity (PPP) Provisions of the purchasing power parity theory of exchange rate by the same group decision in relative prices of commodities. Changes in the rate of inflation should be equal but opposite offset by exchange rate movements. Cite a classic case of hamburger, hamburger in the United States if the value of 2.00 U.S. dollars 1, while the value of 1.00 pounds in the UK one, then according to purchasing power parity theory, exchange rate must be two U.S. dollars per 1 pound. If the prevailing market exchange rate is 1.7 U.S. dollars per pound, then the pound is called undervalued currency, the dollar was overvalued currency is called. This theory assumed that the two currencies will eventually change to the 2:1 relationship. Lack of purchasing power parity theory is its assumption that the main product can be free-trading, excluding tariffs, quotas and taxes and other transaction costs. Another weakness is that it applies only to goods but ignored the service, but just have a very significant gap between the value of the space. Moreover, in addition to differences in inflation rates and interest rates, there are several other factors affecting the exchange rate, such as: economic figures released / reports, asset markets and political developments. 90 years ago in the 20th century, the lack of purchasing power parity basis in fact to prove its effectiveness. After 90 years, this theory seems to apply only to long-period (3-5 years). In this span of cycles, prices eventually move closer to parity. Interest rate parity (IRP) Interest rate parity provisions, a currency against another currency appreciation (depreciation) will be offset by changes in interest rate differences. If U.S. interest rates higher than interest rates in Japan, then the dollar will depreciate the yen, depreciation according to risk-free arbitrage prevent determined. Future exchange rate will be provided for in the day was reflected in the forward exchange rate. In our example, the dollar is seen as the forward exchange rate premium, because in order to buy yen forward rate is less than the spot rate to buy the yen. Japanese yen are considered premium. After 90 years of the 20th century, there is no evidence that interest rate parity is still valid. Diametrically opposed to this theory, usually with high interest rates not only failed to devalue the currency, but because of the long-term suppression of inflation and currency appreciation as a cost-effective. Balance of payments model The model that the exchange rate must be at its equilibrium level - the current account balance can produce stable exchange rate. A trade deficit of the country, its foreign exchange reserves will be reduced, and ultimately reduce their national currencies (depreciation). Cheap currency to the country&#39;s commodities in the international market more price advantage, but also makes imports more expensive. After a period of adjustment, imports were forced to decline, exports increase, so that trade balances and currency stability to the balance.