Trading the FOREX market
FX (FOREX) is a cycle with the following three actions.
- Buy the foreign currency
- Hold the foreign currency while watching the fluctuations in the exchange rate
- Sell the foreign currency you bought
The flow order is:
new order → position holding → settlement order
When this flow is finished, the transaction is closed and the profit and loss become fixed.
What is a loss cut?
The loss cut is a system to forcibly settle the target position in order to prevent further expansion of loss when the profit or loss of the position (*) reaches a certain level.
What currencies can I trade?
US dollar (USD):
The “US dollar” is a basic currency that is often used to settle international commerce and has the largest trading base.
The euro is a single European currency, it is said to be the second key currency and has the second-largest presence after the dollar. The price is quite volatile and it is easy to move in the opposite direction to the US dollar.
Australian dollar (AUD)
The Australian dollar, famous as a representative of high-interest rate currencies, is also called a resource currency (commodity currency), and is easily affected by the mineral and energy industries.
Pound sterling (GBP)
The pound has a relatively high-interest rate and has a volatile price due to its small distribution volume compared to the euro and is, therefore, harder to predict, and therefore more likely to be the target of foreign exchange gains.
New Zealand dollar (NZD)
It is a currency that features a high-interest rate.
Canadian dollar (CAD)
Canada, which is rich in natural resources, is also called a resource currency (commodity currency). It is closely related to the US economy, and the market moves well toward night in Japanese time.
Swiss franc (CHF)
Switzerland, which is a permanent neutral country, is not easily influenced by other countries and is stable as a nation.
Hong Kong dollar (HKD)
It uses a dollar-peg (fixed dollar) system and always trades between HK $ 1 = 7.75-7.85 HK $, and moves in line with the exchange rate of the US dollar.
South African Rand (ZAR)
South African Rand, an emerging market currency, However, the price movement is very volatile.
Norwegian krone (NOK)
Although it is a non-EU member state, its ties are strong with the European economy, and the Norwegian krone yen exchange rate also has a strong correlation with the euro yen exchange rate.
Swedish krona (SEK)
As an EU member state, it belongs to the European economic zone, the Swedish krona yen exchange rate is very similar to the euro yen exchange rate.
Turkish lira (TRY)
It is a popular currency because it has a high-interest rate. However, possibly due to Turkey’s political instability and worsening situation in the Middle East may be a resultant factor in the depreciation of the lira.
This market adopts a “managed float system linked to a basket of currencies,” and is not directly affected by trends in the Chinese economy or the yen exchange rate as the fluctuation range is limited.
Mexican peso (MXN)
Mexico is geographically adjacent to the United States and is its largest trading partner. Therefore, the economy is strongly linked to the US economy, and the Mexican peso market is characterized by a strong correlation with the US dollar.
Singapore dollar (SGD)
The Singapore dollar uses a basket-based floating exchange rate system, limiting the range of fluctuations, and is characterized by relatively high currency stability compared to other southeast Asian countries.
Russian ruble (RUB)
The Russian ruble is attracting attention as a long-term investment destination aimed at swap points because the policy interest rate is high, but the inflation rate fluctuates greatly.
As you can see, there are 16 currencies that can be traded, but which currency should we start with? For beginners, the “US dollar” and “Euro” are good starting points, as “the amount of information is the most” and “the number of people who trade the most”. Economic news in the US dollar and euro arena is also reported daily in newspapers and on the Internet, so it is not difficult to obtain information.