Financial Sharing

How to control the number of foreign exchange players?

June 17, 2020

The number of foreign exchange participants is not the number of investors who want to trade as many as they want, but the risk that their positions can bear when trading online foreign exchange. The number of foreign exchange participants is proportional to the risk.

In general, we suggest that the margin required to build a position should not exceed 20% of our total capital, otherwise there will be a risk of position explosion. For example, the margin we need to trade one dollar against yen is $2.50. If our total capital is $1000 now, it’s better not to build a position more than 0.8 hands, so we can greatly reduce the risk of position explosion.

It can be said that the number of foreign exchange trading hands and the profit and loss of investors are directly linked to the transaction risk. The lower the number of trading hands, the smaller the volatility, the smaller the transaction cost that investors need to pay, and the smaller the profit and loss and risk. Therefore, for the novice of online foreign exchange trading, it is recommended to choose a lower number of hands for trading, 0.01 hand is a good choice, and we will try to do more after we have improved our trading ability and experience.

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