How to operate foreign exchange to make money

In a broad sense, it refers to all assets owned by a country in foreign currency, refers to the flow of money between countries, and is a specialized commercial activity to exchange one country's currency for another country's currency to pay off international creditor's rights and debts. In fact, it is the creditor's rights held by the monetary management authorities (central bank, monetary management institutions, foreign exchange stabilization fund and Ministry of Finance) in the form of bank deposits, treasury bonds, long-term and short-term treasury bonds, etc. Can be used when the balance of payments is in deficit.

In a narrow sense, it refers to various means of payment expressed in foreign currency, which are generally accepted by all countries and can be used for international settlement of creditor's rights and debts. It must have three characteristics: affordability (assets that must be expressed in foreign currency), availability (claims that can be compensated abroad) and convertibility (foreign currency assets that can be freely exchanged for other means of payment).

2. How to make money from foreign exchange?

Foreign exchange trading, like other investments, is "buy low and sell high" to make money, but the traditional investment method is only one-way trading, while foreign exchange trading is two-way, more than general unilateral investment. The common "buy low and sell high" is easier to understand. Generally speaking, it refers to buying when the price is relatively low, and then selling when the price rises to obtain the bid-ask difference. However, for foreign exchange transactions, when you expect one currency to appreciate relative to another, you can buy the former and sell the latter in advance. "Selling high and buying low" can only be realized in a two-way market, and the foreign exchange market is such a market. Specifically, if you expect the euro to depreciate against the dollar, then you can sell the currency pair of the euro against the dollar. If you really expect the euro to depreciate, then you can buy the currency pair of the euro against America at that time and make a profit.

In fact, their principle is the same. They predict the trend of money through their own expectations and earn the price difference in the middle by buying and selling. For foreign exchange speculation, that is, margin trading, because the bid-ask spread is relatively small, the leverage principle is introduced. As long as investors pay a certain margin, they can leverage to enlarge their trading volume, thus obtaining a large amount of funds, and of course there are high risks. Therefore, investors should pay attention to controlling risks when buying and selling foreign exchange.