Principle of foreign exchange margin trading
Foreign exchange margin trading, also known as leveraged foreign exchange trading, is a forward foreign exchange trading method between financial institutions and between financial institutions and investors by using the principle of leveraged investment. The leverage ratios we often see are 1:50, 1: 100, 1:400. Foreign exchange traders should choose their leverage ratio according to their ability to control risks before trading. The higher the leverage ratio, the more trading funds can be used and the greater the risk.
Usually, when doing foreign exchange margin trading, traders need to pay 1%- 10% margin to conduct 100% margin trading. In this way, every foreign exchange investor will enter the market for trading with relatively less funds, thus earning more income.
Since the foreign exchange margin transaction is a leveraged foreign exchange transaction, how to calculate the purpose of the margin? For example, Mr. Zhang wants to trade funds equivalent to $65,438+000,000 through margin. If the margin ratio is 65,438+0%, then Mr. Zhang needs to invest $65,438+000,000 * 65,438+0% = 65,438+0000 to trade in the foreign exchange market. Another example: Mr. Li wants to do foreign exchange margin trading, and he wants to do a transaction of $6.5438+0 million, so he needs to invest $6.5438+0 million, so he can do a transaction of $6.5438+0 million.
Many traders will be eager to try when they know that the funds will be amplified by leveraged trading 100 times or more, but don't forget that when the losses exceed a certain amount, traders will start the stop loss mechanism, that is, they will be forced to close their positions or not place new orders. Therefore, when the account funds are lower than a certain proportion of the transaction funds, your account will be forced to reverse the liquidation.
Investment and financial management are not guaranteed, and so are foreign exchange margin transactions, similar to stocks.
Therefore, foreign exchange margin trading is financial management after all, and basic knowledge is still needed, which is also very important.
Moreover, not all foreign exchange gold companies can choose, and not all investments can be profitable. So it is very important to prepare or get started.
Foreign exchange margin trading first appeared in London in the 1980s.
Foreign exchange margin trading means that investors use the trust provided by banks or brokers to conduct foreign exchange transactions.
It makes full use of the principle of leveraged investment, and it is a long-term foreign exchange transaction between financial institutions and between financial institutions and investors.
In the transaction, investors only need to pay a certain margin to conduct 100% transaction.
So that investors with small capital can also participate in foreign exchange transactions in the financial market.
According to the level of foreign developed countries, the general financing ratio is maintained at more than 10-20 times.
In other words, if the financing ratio is 20 times, investors can conduct foreign exchange transactions as long as they pay a deposit of about 5%.
That is, investors only need to pay $5,000 to conduct foreign exchange transactions of $65,438+$0,000,000.
For example, if investor A conducts foreign exchange margin trading, the margin ratio is 1%, if the investor expects the yen to rise.
Then its actual investment is $6,543,800 (654.38+ 000? 1%), you can buy Japanese yen with the contract amount of100000 USD.
If the exchange rate of the Japanese yen against the US dollar rises by 1%, then investors can make a profit of $654.38 million, and the actual rate of return reaches 100%.
However, if the yen falls 1%, investors will lose all their money and all their principal.
Generally, when the loss of investors exceeds a certain amount, traders have the right to stop the loss mechanism.
Although he has advantages in foreign exchange margin trading, he also has risks.
At present, there are many tutorials and methods for speculating foreign exchange in the market, some of which focus on fundamentals and some on technical aspects.
However, from the news or technical point of view, it has its limitations.
The Course of Foreign Exchange Margin Trading in China
During the blind development of the 1992- 1993 fire market, many Hong Kong foreign exchange dealers went to the mainland to conduct forex futures trading business without approval, attracting a large number of domestic enterprises and individuals to participate. Because the vast majority of domestic participants do not understand the foreign exchange market and foreign exchange transactions, blind participation has led to large-scale and large-scale losses, including a large number of state-owned enterprises.
1In August, 1994, the CSRC and other four ministries jointly issued a document to completely ban forex futures trading (deposit). Since then, the management department has always held a negative attitude and severely cracked down on domestic foreign exchange margin trading.
1998 the people's bank of China began to allow domestic banks to conduct firm foreign exchange trading for individuals.
In June 2006, China Construction Bank cancelled its personal forward foreign exchange trading business in China, and then China Merchants Bank's wealth account also launched the foreign exchange option trading business.
In 2007, Bank of Communications launched a five-fold leveraged foreign exchange margin business, which opened the door to China's domestic foreign exchange margin business. Compared with the domestic stock market, the foreign exchange market is much more standardized and mature. The daily trading volume of foreign exchange market is about 1000 times that of domestic stock market. Therefore,
The trend of economic globalization and liberalization in 2 1 century will be unstoppable. Foreign exchange trading has become an important link in the international financial field.
At present, because China still implements the foreign exchange control policy, each person is only allowed to exchange 50,000 US dollars of foreign exchange each year, which also limits the development of foreign exchange margin trading, because foreign exchange margin trading generally uses US dollars.
Matters needing attention in foreign exchange margin trading
With the rapid development of economy, people pay more and more attention to investment and financial management, and foreign exchange margin trading has become a hot spot. Of course, we still need to pay attention to the following points: 1, don't over-trade; 2. Learn foreign exchange margin trading skills by using simulated accounts; 3. If you go against the market and don't blindly enter the market, you can give yourself a vacation; 4. Set stop loss and take profit.