At present, there are more and more foreign exchange trading methods in the market, but for foreign exchange newcomers, they often feel unable to start and do not know which trading method to choose. Today, I will explain the operation of foreign exchange margin trading. New people who are ready to get involved in foreign exchange margin trading should not miss this good opportunity.
What is foreign exchange margin?
Foreign exchange guarantee metals are financial derivatives, which are measures taken by traders to limit the risks they face. Margin is used to represent a certain percentage of the total amount of the position. Generally speaking, most traders are used to using 0.25%, 0.5%, 1%, and 2% of the margin. The margin consists of two parts, namely the usable margin and the occupied margin. The sum of the two is the net value in the account.
What is foreign exchange margin?
Of course, the margin is not arbitrarily drawn up. It depends on the leverage ratio chosen by the investor. The greater the leverage, the smaller the margin.
Features of margin foreign exchange
- The longest transaction time. 24 hours a day. From the Asia-Pacific region, Europe and North America three regions, each time segment trading together successively. Therefore, the foreign exchange market has eliminated national and geographical limitations and achieved global integration. It is an invisible market.
- Flexible, convenient and fast. T 0 real-time transaction.
- The risk is controllable. The risk is completely controlled by the operator. The system has stop-loss and take-profit tools. This is the biggest advantage compared to stocks. Risk instructions can be set in advance to avoid unnecessary losses caused by human weakness (lucky, greedy, fear, etc.).
- Two-way profit. Regardless of the rise or fall, profits can be made. Suitable for both bull and bear.
- It is vulnerable to the influence of exchange rate policies and political factors of various countries and other major events.
- Margin system. With 5%-10% of funds, full transactions can be made. Strike big with small. 7. There is a price difference. Different currencies have different spreads. That is the difference between the buying price and the selling price. And different trading platforms have different differences. And this spread is the profit of the trader or the cost of the trader. Generally 3-4 points.
Foreign exchange margin calculation method
Margin = lot size * specifications * current price / leverage
Calculation of foreign exchange margin
Specifications: 1 lot of gold refers to 100 ounces. 1 lot of silver refers to 5000 ounces. 1 lot of crude oil refers to 1,000 barrels. Currency pair AB, 1 hand currency AB refers to 100,000 units of A currency.
Margin is not simply a contract divided by leverage. Margin calculations for precious metals, crude oil, US dollars, Euros and other currencies are different.
Assuming the leverage is 100 times, the margin is 100,000 ÷ 100 = 1,000 USD, the margin for 0.1 lot is 10,000 ÷ 100 = 100 USD, and so on.
Leveraged foreign exchange margin trading is illegal
“Online foreign exchange speculation is actually a foreign exchange margin transaction using Internet platforms to attract high-yield and low-risk investors to induce investors to conduct frequent transactions.” Tao Kunyu introduced that my country’s relevant financial regulatory authorities prohibit any domestic and overseas financial institutions. Carrying out or acting as a foreign exchange margin business in China. If an investor participates in online foreign exchange speculation, then the investor will not only participate in foreign exchange transactions, but may also cause the investor’s capital loss. This behavior of the investor is actually illegal. “Foreign exchange margin trading requires high professional quality for investors, while online foreign exchange speculation, as an illegal industry, has very low entry barriers.” Zhou Guolin suggested that investors with such needs must pay attention to the learning and accumulation of relevant professional knowledge, and the regulatory authorities will continue to strengthen the popularization and education of investors’ financial security knowledge. At the same time, the regulatory authorities are strengthening domestic and transnational coordinated supervision.
In fact, not many people in foreign exchange see only liquidation and loss
Isn’t it worthwhile to use foreign exchange to discover some of your weaknesses and correct them when you are young?
He always talks about liquidation. How many people have actually done it? How many people are really willing to take the time to analyze and research?
Foreign exchange is fairer than any industry. In the foreign exchange market, there are no local tyrants, no civilians, no low education, no high education, and no distinction.
The only thing that exists is the ability to make money, everything else is just assistance
I just hope that we don’t absolutely think that doing foreign exchange is only a loss. The core reason should be found from our own “human weakness”.
Foreign exchange margin trading is a way of foreign exchange investment, which tests the economic acumen of investors, but a high-quality platform is a prerequisite for foreign exchange investment. While the possibility of profit has increased, risks have also been similarly amplified. It is really an investment method that requires wits and courage.