In recent years, there have been more and more people doing foreign exchange. After all, doing foreign exchange has indeed brought a lot of benefits to everyone, but if you want to obtain income through foreign exchange, you must have a certain amount of foreign exchange knowledge, especially some basic knowledge. You must master it clearly so that you can better do foreign exchange. However, many novices don’t know much about the basics of foreign exchange. For example, many people don’t know what the foreign exchange basis point means? Then let me briefly talk about the relevant knowledge about foreign exchange base points for everyone.

What does the foreign exchange basis point mean?

The foreign exchange base point is the most basic knowledge point in the basic knowledge of foreign exchange. The foreign exchange base point is also called a point. Generally speaking, the smallest unit of exchange rate change is a base point. Simply put, it is the change in the last number in the exchange rate, as long as one change is required. The unit can be called the change of the foreign exchange base point.

I believe that this explanation is not easy for many newcomers to understand, because many people do not know what the foreign exchange market is like, so it is difficult to understand what this foreign exchange basis point means? Because the foreign exchange market is a two-way market, there are no restrictions on shorting. That is to say, when we trade in the foreign exchange market, it is equivalent to buying one currency and selling another currency at the same time, which is equivalent to using Currency pairs are used for trading, so changes in foreign exchange base points have become very important.

Pricing method of foreign exchange rate

Generally speaking, there are two pricing methods for foreign exchange rates, one is the direct pricing method, and the other is the indirect pricing method. The so-called direct pricing method is to use a certain unit of foreign currency as the standard to calculate and calculate the payable How many units of national currency. The indirect pricing method uses a certain unit of domestic currency as the standard to calculate how many units of foreign currency should be received.

Generally speaking, most countries use the direct pricing method. For example, the direct pricing method of the U.S. dollar is to treat the U.S. dollar as a commodity and the U.S. dollar as 1 unit, and this unit is unchanged, and the currency used as the currency is The change is similar to how we buy and sell a piece of clothing. How much money is bought for a piece of clothing, and then the clothing is sold at a price slightly higher than the purchase price, so that you can make a difference in price, but the commodity remains unchanged. Currency But it has increased in the process.

In fact, doing foreign exchange is not an easy task. For novices, there are a lot of basic knowledge that needs to be mastered. If you don’t know these basic knowledge, it is difficult to deal with the problems faced in this process, so novices must master the basic knowledge. , And then do foreign exchange investment.