Forex Funded Trader program is a new transaction made possible by the 1998 amendment of the Foreign Exchange Law (Forex and Foreign Trade Law). After that, the revised Financial Futures Trading Law, which came into effect in July 2005, and the Financial Instruments and Exchange Law, which came into effect in September 2007, made foreign exchange margin trading more fair and transparent. “Forex trading” is a transaction that exchanges two different currencies (such as the US dollar and the Japanese yen). The ratio when exchanging currencies with each other is called the exchange rate, and it fluctuates due to various factors such as the political and economic conditions of each country, but it is determined only by comparing the two countries.
A new transaction in foreign exchange margin trading is a transaction in which a new foreign exchange transaction is performed, and the foreign exchange held by the new transaction is “open interest” (when a “new transaction for buying” is performed). When you make a “buy open interest” or “sell new transaction”, it is called “sell open interest”). You can settle open interest by performing a settlement transaction opposite to the new transaction, and you can exchange profits and losses between the new transaction and the settlement transaction.
For example, for 110 yen per US dollar, we will make a “new transaction for buying” for 10,000 US dollars. After that, you can receive a trading margin of 50,000 yen (115 yen x 10,000 US dollars-110 yen x 10,000 US dollars) by performing a “sell settlement transaction” of 10,000 US dollars for 115 yen per US dollar (115 yen x 10,000 US dollars-110 yen x 10,000 US dollars). Swap points are not considered).
Trading method of foreign exchange margin trading;
Forex margin trading is a transaction that allows you to trade forex with a certain amount of margin as collateral, and the amount of foreign exchange is several to several tens of times that amount. With “Daiwa FX”, customers can choose from 1x, 2x, 5x, 10x, 20x, and 25x leverage, which is about 1x, 2x, and 25x the margin amount, respectively. Forex trading up to 5 times, about 10 times, about 20 times, about 25 times is possible.
However, even if you make a “new transaction for selling” for a “new transaction for buying” (“new transaction for buying” for a “new transaction for selling”), it does not mean that you have settled. When making a settlement, you will be required to perform a “sell settlement transaction” for a “buy new transaction” (“buy settlement transaction” for a “sell new transaction”). The terms “strong yen” and “weak yen” are used to describe the exchange rate. In Japan, it is viewed based on the yen, so it looks like the figure below.
Generally, in Forex trading, if you think that the value of the US dollar will increase in the future, you will buy the US dollar, and conversely, if you think that the value of the US dollar will decrease, you will sell the US dollar. If you buy US dollars at 100 yen per US dollar and sell them at 120 yen, you will get a foreign exchange gain of 20 yen. On the other hand, if the yen strengthens to 80 yen, there will be a loss of 20 yen.
In foreign exchange transactions, information such as policy meetings, economic conditions, and economic indicators that cause exchange fluctuations is indispensable.
Mechanism of Daiwa FX:
“Daiwa FX” is a bilateral transaction. We offer customers the exchange rates that can be traded by referring to the exchange rates in the interbank market (this rate is called the “offer rate”). Customers are required to make transactions with us based on the asking rate (because of bilateral transactions with us, if the customer buys US $ 10,000 / yen, we will make US $ / yen 1 Will sell 10,000 US dollars).
On the other hand, in order to avoid conflicts of interest with customers, we will cover transactions concluded with customers in the interbank market at any time (in the previous example, US $ / yen is the US $ 10,000). I’ll take it).