Foreign Exchange Rates

Besides stocks and futures, foreign exchange can also be invested. Let's talk about what foreign exchange is. How should foreign exchange be bought and sold?


1. What does buying and selling foreign exchange mean


Buying and selling foreign exchange refers to buying and selling foreign currency, foreign currency deposits, foreign currency securities (government bonds, treasury bills, corporate bonds, stocks, etc.), and foreign currency payment vouchers (bills, bank deposit vouchers, postal savings vouchers, etc.). Now we say that buying and selling foreign exchange generally refers to buying and selling foreign currency. To put it simply, you can think of buying money as buying shares of a specific country, which is a bit like buying shares of a company. The price of money directly reflects the market's judgment on the current and future economic situation of a country.


Second, how to buy and sell foreign exchange


1. Learn to establish a position in a foreign exchange account, stop loss and profit closing. "Establishing a position" is also called opening, that is, buying one currency and selling another at the same time. After opening the market, the currency bought is called a long position and the currency sold is called a short position. Choosing the appropriate exchange rate level and the opportunity to establish a position is the prerequisite for profit. If the time to enter the market is good, the opportunity to make a profit will be great; On the contrary, if the timing of entering the market is improper, losses will easily occur.


2. The principle of buying up and not buying down Foreign exchange trading is exactly the same as the principle of stock trading, which is to buy up rather than buy down. Because there is only one mistake in the process of price increase, that is, when the price rises to its peak. In addition to this, any other buying is right.


3, "Pyramid" overweight principle "Pyramid" overweight means that after buying a certain currency For the first time, the exchange rate of the currency rises, and it seems that the investment is correct. If you want to overweight and increase the investment, you should follow the principle of "each overweight is less than the last one". In this way, there will be fewer and fewer purchases, just like the pyramid. Because the higher the price, the greater the possibility of approaching the rising peak and the greater the danger. At the same time, buying while rising will cause the average cost of bulls to increase, thus reducing the rate of return.


Recommended reading:

China's exchange rate system and foreign exchange control

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