Forex novice beginner: novice to know a few foreign exchange trading patterns

In foreign exchange transactions, you need to follow a certain pattern to carry out, so that your foreign exchange transactions can be carried out smoothly. The following is the Forex website for you to introduce the mode of foreign exchange trading what, I hope that your speculation on foreign exchange has some help. Foreign exchange trading mode: inquiry, a single market maker Although ECN model is more fair and transparent, but these "real" foreign exchange market threshold is higher, usually only to the large trading volume and high net worth of financial institutions open, so individual investors mainly through the foreign exchange margin or domestic real trading foreign exchange spot transactions. Due to the domestic real disk point spread high, one-way trading, no capital leverage and other shortcomings, experienced foreign exchange investors usually choose foreign exchange margin trading. At present, the more well-known U.S. foreign exchange margin brokers in China, including FXCM, Kasai, 40, IFX, CMS, etc.. Recommended reading U.S. data reports Citi said the dollar bulls should be careful the European Central Bank to start disguised QE European Central Bank financing operations difficult to solve the debt crisis in Europe European Central Bank opened the floodgates of liquidity S&P downgraded Hungary's rating to BB + Hungary's central bank raised the benchmark interest rate to 7% of Japan's benchmark interest rate to maintain "in place" vigilance of the foreign exchange Losses are greater than investment gains Unlike the ECN bidding model, foreign exchange margin trading is usually the use of inquiry and a single market maker model. Individual investors face a single pair of home inquiries and transactions, the fairness of the offer depends on the integrity of the broker. Brokers themselves are market makers, they generally first summarize and filter the price of the bank or ECN, and then add their own profits and then quoted to the customer, so the customer is actually trading with the market maker (in the ECN is to trade with anonymous traders). Customers see and trade is not the real price of the market, and the execution price of the transaction is determined by the foreign exchange broker, so it is not surprising that the transaction price is often in favor of the broker. The customer's order into the market maker's system, the first long position and short position between the internal hedge, and then the remaining net position to the bank they rely on or ECN hedge, can also be partially hedged or simply do not hedge, which belongs to the category of betting. The bet is that these market makers do not take all the net position to the ECN or bank to hedge. For example, a foreign exchange broker received a customer 1,000 hands (foreign exchange trading unit, usually refers to 100,000 units of the base currency) to buy the euro / dollar instructions and 800 hands to sell the euro / dollar instructions, then the internal hedge after the remaining 200 hands of the euro / dollar net long position, but the company is willing to bear the risk of market fluctuations in this part of the position, and did not put the 200 hands of the euro / dollar net Long position to the bank or ECN to do a reverse transaction, which is called and customer "betting". In the U.S. laws and regulations do not specify how to hedge the risk, which depends entirely on the trader's own risk control strategy. If the customer's single can be completely hedged in time, then the market maker almost do not have to bear additional market risk, to obtain a more stable income. In reality, however, market makers generally hedge their bets to a greater or lesser extent, which increases their own risk. The existence of this hedging/betting model means that in certain specific periods of time (such as the release of major U.S. data, or when market prices fluctuate violently), you may not be able to connect to the broker's trading system on a regular basis to trade effectively and quickly, because at this time it is very difficult for brokers to transfer the market risk in a timely manner within the limited cost range, so it simply restricts the customer to place an order or to adopt some other ways. This particular time often appear single can not be completed the phenomenon in the domestic bank foreign exchange real trading is also common. From now on, as long as you actively master these basic knowledge, you can speculate in foreign exchange know your enemy and know yourself, to do a hundred battles. 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