Jayden Forex trading was created along with international trade as an instrument for settling debts and obligations between countries internationally. However, in the last decade, forex trading has not only grown exponentially in volume, but also has undergone significant changes in substance.
Forex trading is not only an instrument of international trade, but has become the most important financial commodity on the international scene. The types of forex trading are also becoming increasingly diverse with the changing nature of forex trading.
Forex trading can be mainly classified as cash, spot, contract spot, futures, options and forward transactions. Specifically, cash transactions are purchases and sales between travellers and those who need forex trading cash, for various other purposes, including cash, forex trading travellers’ cheques, etc.
Spot trading is a transaction between large banks, and between large banks acting on behalf of large clients, where the sale and purchase are agreed to be concluded, the funds are received, and settled within two business days at the latest.
Contract spot trading is a way for investors to enter into a contract with a financial company to buy and sell forex trading, and contract spot trading is an investment suitable for the general public.
Futures trading is trading at an agreed time and at a determined exchange rate, with a fixed amount per contract. Options trading is trading in advance for the option to buy or sell a currency in the future. A forward transaction is for delivery on an agreed date according to a contract, which can be large or small and has a more flexible delivery period.
Forward foreign exchange, also known as foreign exchange, refers to the transaction between the two parties involved in the foreign exchange transaction, the foreign exchange that is delivered after two working days, means that the two parties of the foreign exchange transaction have reached the transaction. After that, the foreign exchange for delivery will be processed at a scheduled time in the future two working days later.
The purchase and sale of the forward foreign exchange are generally used by import and export enterprises for hedging foreign exchange. Banks use it to balance foreign exchange positions.
In terms of the volume of forex trading, forex trading arising from international trade accounts for a decreasing proportion of the overall forex trading, and according to statistics, this proportion is currently only about 1%. It can be said that the mainstream of forex trading is investment-based and aimed at making a profit from fluctuations in forex trading rates now.
The sudden rise and fall of the exchange rate, not only generates great foreign exchange risk, but also implies huge profit opportunities.
Speculators buy the currency with the exchange rate is going to rise, and sell the currency with the exchange rate is going to fall, according to their predictions. If the prediction is correct, you can earn a certain exchange rate difference, the difference is the profit of speculative forex trading.
If the amount of money invested is very large, the potential profit is very lucrative. so speculative forex trading markets attract many speculators.
It can be said that most of the foreign exchange trading in the current international financial market is for the purpose of speculation and profit. In countries and regions with developed financial industries, not only banks, financial institutions and large corporate consortia are speculating in the foreign exchange market, but also many small traders and ordinary people are actively involved in the speculation in the foreign exchange market. Of course, they are buying and selling through agents. At the same time, due to their small size, customers do not have enough money so they trade through margin.
