2 thoughts on “What does "leverage" in foreign exchange transactions mean”

  1. Lexal transactions are also called virtual trading and gold transactions. That is, investors use their own funds as a guarantee, and the financing amplification provided by banks or brokers for foreign exchange transactions, that is, to magnify investors' transaction funds. The proportion of financing is generally determined by banks or brokers. The greater the proportion of financing, the less customers need to pay.
    The explanation:
    I international financing multiple or leverage ratio between 20 and 400 times. The standard contract for the foreign exchange market is 100,000 yuan per hand (referring to the basic currency, which is the currency pair of the currency pair For the previous currency), if the proportion of lever provided by the broker is 20 times, the sale of 5,000 yuan (if the currency of the buying and selling is different from the account margin currency, it needs to be converted); Buying and selling a deposit of 1,000 yuan. The reason why banks or brokers dare to provide a large financing ratio is because the average daily volatility of the foreign exchange market is very small, only about 1%, and the foreign exchange market is continuous transactions. With comprehensive technical means, banks or brokers are completely You can use less investors to resist market fluctuations without having to bear risk. Foreign exchange margin belongs to spot transactions and has some characteristics of futures transactions, such as buying and selling contracts and providing financing, but its positions can be held for a long time until it takes initiative or forced liquidation.

    In foreign exchange margin:
    advantages:
    The foreign exchange margin is the most free, fair, and most advanced transaction method in all financial markets in the world today. Its advantages are as follows:
    1, 24 hours transactions
    From Monday to Friday, 24 hours a day traded, easy to enter and exit at any time, avoiding the risks caused by empty jump the next day. However, you can avoid it through the preset order or empty position. The 24 -hour transaction also gives office workers a lot of investment in investment, especially the active period of the foreign exchange market is relatively concentrated at 3 pm to 11 pm. The clan engaged in this most free "second occupation" provides convenience.
    2, global market
    participants in the foreign exchange market, including banks, central banks, financial institutions, import and export traders, investment departments, fund companies and individuals, according to the "International Monetary Fund The statistics of the meeting are close to $ 2 trillion daily transactions, so as a global market, it is impossible to be manipulated by some people or institutions. First, it is convenient for technical analysis, and the first is to facilitate large funds to enter and exit. There are also high transparency in the foreign exchange market, and the market, data and news are public, and investors can get relevant information at the same time.
    3, less transaction varieties
    The foreign exchange market transactions are concentrated on the six varieties of currency composed of seven countries or regions, namely the euro/USD, British/USD, Australian dollar/USD/yen, yen,,, yen, yen, yen, yen, yen, yen,, yen, yen,, yen, yen,,, USD/yen, yen,,, USD/yen, yen,, US dollar/Swiss franc, dollar/Canadian dollar. And the linkage of each variety is strong, which is easy to focus on investment analysis.
    4, the risk can be flexibly controlled
    because the average daily volatility of the foreign exchange market is about 1%, and the leverage ratio provided by the broker is usually 100 times. The risk can be flexibly grasped. Novices can start with 1%risk income. After entering the state of stable profitability, the proportion of risk returns can be gradually increased. For example, if an investor opens an account with 1,000 yuan, only 1,000 (1K) when the transaction starts the transaction, and the risk is controlled by 1%. You can also use the deposit transaction as a real disk.
    5, two -way transactions, flexible operation
    It can be bought first, or sold first and then buy, and there is no limit to buying and selling currency (this is an important difference from the real market), of course, it is also T 0, and it is also T 0. During the day, you can repeatedly do short -term. Buying and selling can be preset for price limits and stop loss orders to keep profits and control losses.
    6, high leverage ratio
    high leverage is convenient to flexibly build positions, but high leverage is a double -edged sword. For highly high -level investors, under the premise of strict control, profit or floating profitability It can continue to use high leverage to increase positions, which provides possibilities for achieving huge profits.
    7. Low transaction costs
    Foreign exchange margin transactions have no commissions. In addition to 0.01 yen, the other varieties are 0.0001, which means one in ten thousand). In addition, holding a position overnight, such as holding high -interest currency, you can enjoy interest; if you hold low -interest currency, you need to pay interest. Overall, trading costs are very low.
    8. The threshold for entering the market is low
    The participation in foreign exchange margin transactions can open an account through fax and network, the procedures are simple. Each foreign exchange broker has different amounts of minimum funds for account opening, most of which are between hundreds of dollars (mini accounts) and between thousands of dollars (standard accounts). The operation level, small funds can grow rapidly, which provides another battlefield for the realization of wealth dreams for the working class.
    Disadvantages
    , then the disadvantage of foreign exchange margin transaction:
    is easy to lose, fast and much loss. You can earn 10,000 for half a day, and you can lose 10,000 in half a day. In short, risks are always proportional to returns.
    If you want to make money from the futures market, such as the foreign exchange market, you must first have a rich and solid financial knowledge, and coupled with the cooked trading techniques, you can make money from it!
    The foreign exchange margin transaction uses the principle of leverage. Traders can use the characteristics of funds to enlarge to quickly accumulate their own wealth through correct transaction methods. This method of wealth amplification is accepted by more and more foreign exchange investors.

  2. Learn is a tool in our real life to help us use small strength to move larger objects. In fact, foreign exchange leverage is the same. Foreign exchange contracts are generally about 100,000 funds. A lot of funds smaller or even smaller to make the original value contract.
    . For example, a leverage for a foreign exchange platform to customers is 200 times. In this way, it may be possible that he only needs a mortgage (security deposit) of $ 500 to make a contract worth $ 100,000. People, because the small blog is always the favorite of speculators.

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