Foreign Exchange Market

Foreign exchange leverage multiples and risk control

The

low-leverage platform is saying that the risk of high leverage is huge every day. The highly leveraged platform is saying low leverage on the daily basis, and stress that the risk is not related to the leverage multiple, but depends on the trading model. The public said that the public is reasonable, the woman said that the woman is reasonable, in the end, what is wrong? I will talk about my views with my personal experience and understanding of foreign exchange transactions.

First of all, it needs to be clear that under the premise of completely shielding humanity, the leverage ratio is not necessarily related to the risk of foreign exchange transactions. For example, the same is 5,000 US dollars, 20 times leverage, full warehouse is 0.7 hands, the risk of a burst of positions that can be assumed is about 600 points. And 400 times leverage can also do 0.7 hands, and the risk of a burst can be more than 600 points. This is also the most powerful weapon for high-lever leverage to counter the low-leverage risk theory.

But is this really the case? Under the premise of 400 times leverage, 5000 dollars can be opened to more than 15 hands. Even with 15 hand-held bins as an example, the risk of a burst is only about 30 points. In forex trading, these 30 points may be minutes.

The current foreign exchange company basically promises to give the user a rebate, and the general rebate point is around 0.6 points. The implementation of the rebate system is undoubtedly a signal to the customer: “Frequent master trades, even relying on rebates will have very objective benefits.” Under the guidance of this subtle mind, many foreign exchange investors have chosen For the number of masters, ultra short-term trading. This is also why many foreign exchange investors feel that foreign exchange risk is too great to make money.

I have a friend who has opened a $2,000 account. I don't know which platform to use. The platform promised a rebate of 0.6 points/hand, and then my friend felt that frequent transactions would bring him enough income. I remember when he was the craziest, he traded 30 lots a day, if he could continue. Then, in a month, his income on the rebate was as high as $3,600, which is more than 1.5 times his principal. However, in less than a week, due to the violent fluctuations in the foreign exchange market, he broke the position, leaving only less than $200 in the principal. At this time, his rebate amount is about 800 dollars. He chose to re-enter all the rebates and make up about 1,000 dollars. Ready to copy the book, the next day he broke the position, the capital is only more than 100 dollars. At this point, his principal has been basically lost. So 憧憬 is beautiful, but reality is cruel.

In fact, his behavior is well understood, because people are gambling. After all, the difference between 2 and 3 points can be found on a K line, and it is very simple to close the position when it comes to the entrance price. Then many people will choose to do a large amount of frequent trading to brush the amount, in order to pursue huge rebate profits. Moreover, in the course of operation, it is accompanied by the huge profits caused by the huge fluctuations, which makes people more eager. This is like buying a welfare lottery. How many people who buy lottery tickets are for the welfare business? I think more people are buying the lottery with the idea of ​​getting rich overnight. After all, "If I have 5 million." This sentence has become the most frequently discussed topic in the streets.

In fact, the platform with low leverage is to use leverage to limit the maximum position of customers. Even if you are full, it is a very low position, your risk-taking ability is very strong, it is difficult to break the position. Therefore, even a very aggressive investor, his losses will be effectively controlled.

Every investor knows that the greater the risk, the greater the gain. But everyone also needs to know that when the risk is too high, the benefits become minimal. Looking at internal and external disk futures and other leveraged financial derivatives, we should invest in the pursuit of profit, not gambling. Please keep in mind that high leverage can make you rich overnight, but the bigger possibility is to make you lose your money.

Foreign exchange leverage multiples and risk control
The low-leverage platform is saying that the risk of high leverage is huge every day. The highly leveraged platform is saying low leverage on the daily basis, and stress that the risk is not related to the leverage multiple, but depends on t

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