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| Typical Transaction |
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Typical Transaction The following are examples of typical transaction. 1. A trader has USD 2. The current Offer price/ Ask price for USD/EUR is 0.8114/0.8119 as shown on the transaction screen; this means you can sell EUR 0.8119 to buy USD 1 or sell USD 1 to buy EUR 0.8114, with the price difference of 5 pips. 3. A trader makes a transaction of buying USD 100,000 and selling EUR 81,190 using the leverage ratio of 100:1. (Only USD1,000 out of the margin in the trader's account is used and the balance is USD4,000.) 4. As is estimated, the USD/EUR exchange rate rises to 0.8247/0.8252, that is, EUR 0.8247 can be bought by selling USD 1 or USD 1 can be bought by selling EUR 0.8252. As the trader has USD long position (rise of USD is expected) and EUR short position, the trader should sell US dollars and buy Euros to gain profit.
1. When closing a postion, a dealer may get 82,470 EUR from the sold 100,000 USD. If he sold 81,190 EUR at the beginning, he will gain 1,280 EUR, viz. 1,551 USD (based on rate of tow currencies). Although it looks very complicated in the beginning, dealers will be used to it soon. Besides, to master basically technical method is definitely useful. The dealer could obtain transaction experience without holding true position via using a free “Stimulating Account” provided by us. However, what needs to be noted is the operation of stimulating account is likely far away from practical transaction. The main reason is that practical transaction involves other many factors, especially some so-called “emotion” factors, while the dealer’s emotion in stimulating operation is quite different form that in practical transaction. Transaction Proficient The FX dealers should put their eyes on events happened in the world everyday and be able to forecast relationship among different markets. For instance, a shrewd dealer will pay much attention to gold price, if gold price rises through this currency, he could predict this currency will go weak. Meanwhile, the market tendency needs to get concern consistently. Generally, the currency does not change its trend at a night, because new trend of currency needs some time to come into being. Therefore, even if you are a proficient, you maybe predict trend wrongly. The individual dealer should not lose their heart due to wrong judgment and keep a good state of mind. Here, we emphasize the importance of limiting failure via stopping loss. Generally speaking, the dealer could make acute response to uncertain fluctuation of currency, and after all, the fluctuation of currency is not caused by transaction wholly. Therefore, stop-loss takes a broader role in FX transaction than that in other transaction markets. Many factors should be considered in FX transaction, which let many interim dealers shrink back at the sight. However, to those dealers who rely on their forecast to close a position, it is the point that FX transaction attracts people. The more transactions are made, the richer experience the dealer will have. The 21-century FX transaction is not only full of pleasure but also could make a profit. To sum up, we should persist in principles of crossed-market expectation, placid mind and stop-loss; and the transaction should be made consistently to accumulate experience. |
