What is foreign exchange margin for? What is the difference between him and the commission spread?

Margin is related to the size of leverage, and each transaction will occupy a part of the account funds, which is called margin. It has nothing to do with the commission spread, the commission is required to be added by the second-level ** business, the spread is stipulated by the foreign exchange company, both of which are stipulated and are not affected by each other, in the case of the same capital and the same trading volume, the greater the leverage, the less margin is occupied, and the more free margin so that the more volatility the available margin can carry. Therefore, the greater the same ** leverage, the less margin is occupied, and the greater your ability to resist risk (the number of points that can be supported) Why do people often feel that 400 is risky?

Because there is no control**. For example, if you have a principal of 1,000, you can't make a standard lot at most with 100 times leverage, and you can do a standard lot at most; 400 times leverage can be done more than 2 standard lots, at this time, a little fluctuation of your profit and loss will be magnified year-on-year. Therefore, the concept of real leverage is introduced:

The market value of your ** your principal.

Foreign exchange margin trading refers to signing a contract with a (designated investment) bank, opening a trust investment account, depositing a sum of funds (margin) as a guarantee, and setting a credit operation limit (i.e., 20-200 times leverage) by the (investment) bank (or brokerage bank). Investors can freely trade spot foreign exchange of the same value within the quota, and the profit or loss caused by the operation will be automatically deducted or deposited from the above-mentioned investment account. It allows small investors to use smaller funds, obtain larger trading amounts, and enjoy the same use of foreign exchange transactions as a risk avoidance and create profit opportunities in exchange rate fluctuations like global capital.

Foreign exchange margin trading is when investors trade foreign exchange with a trust provided by a bank or broker. It makes full use of the principle of leveraged investment, a forward foreign exchange trading method between financial institutions and between financial institutions and investors. In trading, investors only need to pay a certain margin to carry out 100% of the amount of trading, so that those investors with a small amount of capital can also participate in the financial market for foreign exchange trading.

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, then investors only need to pay about 5% of the margin to be able to trade foreign exchange. That is, investors only need to pay $5,000 to make $100,000 forex trades.

Margin is like a prepaid deposit for buying something, and you will be repaid after the transaction is completed, and the commission spread is the handling fee, and now there is generally only a spread, unless it is a ** customer who has a commission.

The difference between the guarantee and the smooth transaction is that it is only a deposit, which is temporarily frozen, and not a fee charged.

The so-called margin is actually a small and large. That is, you can take very little money and place very large bets, even hundreds of times. And that's pretty much what foreign exchange margin means.

The commission and spread are the fees charged by the platform provider and the first business, which are essentially different from the margin.

"Dot"In order to accurately and conveniently represent the exchange rate, it is generally expressed in 5 digits, and the unit of the smallest change is usually called"Dot"。

For example, the smallest unit of USDJPY is the Japanese yen, or 1 pip of the Japanese yen. The smallest unit of GBPUSD is the US dollar, or 1 pip of the US dollar.

Spreads"When the exchange rate changes, the difference in pips fluctuation is"Spreads"。For example, USDJPY changes from USDJPY to JPY, with a spread of 100 pips. GBPUSD has a spread of 200 pips (the conversion to USD corresponds to 1 pip, depending on how many significant figures there are after the decimal point).

**Spread: When trading in foreign exchange, there is a difference between the ** price and the selling price, such as: US dollar yen (USDJPY)**, it is the selling US dollar price, which is **US dollar price, which is called the spread of 10 pips. GBPJPY**, the spread is 10 pips.

The most straightforward understanding is that the transaction cost (fee) is that you need to pay so much fee for a transaction.

It is the difference between the bid price and the ask price, for example, ** is EURUSD, and there is a difference of 3 points, and these 3 points are the spread, and this difference is the money that the trader wants to make.

** and sell the spread, if the spread is 2 points, at the same time ** sell at the same time will lose 2 points, ** is a two-way charge and this is not the same.

It is the difference between the bank's ** price and the bank's selling price.

For example, if the euro is sold to the bank, and the euro is sold to the bank, then the spread is 3

This 3 is the spread.

Understandable, right?

It is the difference between **** and selling, and it is also the handling fee paid for making orders.

One lot is 100,000 base currency, which is 100,000 EUR, which is USD. Margin is 118770 400 = USD, Profit = (USD.