1、CHIFLEY： Forex leverage and bond tradingWhat is the leverage in foreign exchange trading? CHIFLEY experts tell you. Each online forex broker offers leveraged trading, with leverage typically between 1:2 and 1:3000, with the most popular leverage ratios being 1:100 and 1:50. Leveraged trading is also
2、 known as margin trading because you only need one premium to support your trade, and the other amount will be provided by your broker. It is believed that the risk of margin trading is higher than the risk of unleveraged trading, but margin trading can provide a significant opportunity for many for
3、eign exchange traders to rush. If you do not use leveraged trading, you must invest a large amount of money to open a position creating a standard hand position requires a deposit of more than $100,000. If you use leveraged trading, you only need to use a portion of the funds to create the same posi
4、tion the remaining funds are “borrowed” from the Forex broker. This means that you can create a $100,000 position with leverage of $1,000 and 1:100, and a favorable price change per point allows you to make a profit of $10. Of course, if the price action is bad for you, every price change will make
5、you lose $10. Please keep in mind that your premium must meet the insurance requirements and, when your position is not closed, it is held by the broker throughout the entire period. This means that the available premiums in your account are usually less than 100% of the amount of insurance you need
6、 to hold a position for example, if the leverage ratio is 1:100, subtract $1,000 from the $100,000 position. Dont forget that your open position will experience some floating losses due to the brokers bid/ask spread. This means that if you have only $1,000 in your account, your position will be imme
7、diately closed due to the recovery of the premium. Therefore, please always keep in mind that you will have enough insurance to cover your losses, because the broker will not let yourself lose money. If the available insurance gold drops to a very low level, the broker will force the liquidation of
8、your position.Now, lets consider the same case of using a forex broker as a market maker. Whenever an order is created, the broker only needs to freeze the necessary funds (based on the leverage used) and confirm the transaction. Depending on the nature of the risk management of the forex broker, th
9、e order will be consolidated and sent to the liquidity provider. When the currency pair has the same number of buy orders and sell orders, the order will be internally matched. When the customer completes the order, the system performs a simple ledger carry-forward based on the net equity value. Dep
10、ending on the mechanism used, the position of the foreign exchange broker as the counterparty may or may not be closed simultaneously with the position of the liquidity provider.Buying and selling currency pairs is similar to buying and selling tangible assets; for tangible assets, the actual product cost will go through many parties before reaching the manufacturer. Retailers and sub-sales will extract profits from them. Similarly, the forex broker will obtain the profit due by the spread and then send the actual price to the counterparty.
