Home The role of margin and leverage and risk introduction

The role of margin and leverage and risk introduction

For foreign exchange traders, forex rebate club and forexrebateclub cashbackforexbroker an important concept to understand, if used properly, you cashbackforexexness get profit, if not used properly, will cashback forexcur losses today I will talk to you about the margin and leverage related content 1. In foreign exchange trading, investors only need to pay a small amount of margin in accordance with a certain percentage can participate in the purchase and sale of products leveraged transactions, that is, investors use part of the funds as a guarantee to obtain financing to enlarge the transaction, enlarge the investors trading capital in foreign exchange transactions, investors only need to pay 0.5% to 20% of the margin, you can carry out 100% of the amount of the transaction 2.  The amount of margin and the amount of margin occupied, the greater the leverage the smaller the margin, and vice versa, the larger the customer in placing orders for different products margin is not the same We take the pound against the Australian dollar currency pair (GBP/AUD) as an example GBP/AUD to do 0.01 standard lot is 18 U.S. dollars of margin, so if you have 600 U.S. dollars, you can resist 600-18 that is 582 USD fluctuations if you do 0.1 standard hand, that is, 180 USD margin, then if you have 600 USD, you can resist 600-180 that is, 420 USD fluctuations Margin trading has the characteristics of a small boom, in short, is to use ten dollars to buy dozens of dollars of things, we call this the leverage effect margin trading is the use of leverage ratio, the purchasing power to enlarge, with less money Can trade, so as to achieve the effect of financing 3. margin and leverage how risky Although margin through leverage can double the profit, but the volatility of the market will have a proportional amplification of the impact of the invested funds, this leverage can allow you to gain profits, but also losses can be incurred Therefore, margin in the leverage can provide great profit potential at the same time, there is also the potential for loss  All in all, this is something that can only be understood more thoroughly in practice

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