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Foreign exchange margin trading leverage

cashback forex forexbonusrebate margin trading forexrebatesbrokers foreign exchange margin trading, refers to the contract with the (designated investment) bank, open a trust investment account, deposit a sum of money (margin) as a guarantee, by the (investment) bank (or brokerage house) set credit operating limit (that forex discount brokers, 20-200 times the foreign exchange leverage effect) investors can freely buy forexdiscountbrokers sell the same value of spot foreign exchange within the limit, operation The profit and loss caused by the operation, automatically from the above investment account deducted or deposited so that small investors can use smaller funds to obtain a larger trading volume, and global capital enjoy the same use of foreign exchange transactions as a risk-averse use, and in the exchange rate changes to create profit opportunities Foreign exchange margin trading concept If the margin financing ratio of 100 times, that is, the minimum margin requirement is 1%, the investor as long as 1000 In addition to capital amplification, another attractive feature of Forex margin investment is that it can be operated in both directions, so you can buy when the currency is rising (long) and sell when the currency is falling (short), thus eliminating the need to be restricted by the so-called bear market that prevents you from making money. With the increasing frequency of international trade contacts and the integration of global financial markets, the foreign exchange market has actually become the worlds largest financial trading market, playing a key role in the transnational flow of funds because of its connectivity to the five continents, 24-hour trading mode, fair and transparent market behavior and smooth liquidity, T+0 clearing system. Has become a popular investment and financial tools in recent years, as well as manufacturers due to changes in the exchange rate, the best channel to avoid risk However, the exchange rate, such as full trading fluctuations are not large (average daily amplitude of 0.7-1.5%), the investment return is small, so the general foreign exchange transaction amount is very large, and not most small investors can use the foreign exchange margin system, the principle of leverage, so that the foreign exchange market is increasingly active, the volume of transactions has increased dramatically. Volume increased dramatically whether as a business capital investment or personal financial diversification is not considered a new concept How to avoid the risk of high leverage ratio The current mainstream foreign exchange brokers standard account generally uses a high leverage ratio of 100:1, that is, if the account full operation, the reverse fluctuation of 1% will cause a blowout, so for how to avoid the risk of high leverage ratio is very important To achieve risk avoidance, we must first recognize the risk, high leverage is actually a double-edged sword, with a good can be invincible, with a bad can only hurt people hurt themselves so-called different leverage ratio, in fact, only the maximum number of full lots of your account is different, when you realize the essence of this, you know how to respond to you can fully control the maximum number of lots to adjust the leverage ratio by themselves, such as in For example, under the leverage ratio of 100:1, your account capital allows you to take a full position of 50 lots, at this time, if you control the maximum number of lots never more than 5 lots, your true leverage ratio will drop to 10:1 According to statistics, the current account can maintain a profitable true leverage ratio is generally controlled between 4:1 and 20:1, so you strictly control their leverage ratio in this range to a large extent Control your own risk to ensure high returns at low risk
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