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How to lock foreign exchange risk

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Exchange rate fluctuations are an inevitable result of economic development. First, the world is divided into many countries, not a single country. Second, the development models and speeds of various countries are not synchronized. Third, mutual trade between countries has led to the need for exchanges between currencies. Fourth, a fixed exchange rate can lead to irreconcilable contradictions. For example, if it is a fixed exchange rate, the currency must choose who is fixed. This is a big problem. If you choose beauty, then the fiscal and monetary policy will inevitably affect the country. Then the country that is staring at the United States has naturally become a vassal state. If you stare at gold, the amount of gold is not enough. Fifth, the floating exchange rate solves many problems, which is the same as the natural law. It is easier to stabilize during the float. How does foreign exchange have locked in exchange rate risk? Hedging against hedging refers to selling a pair of the same currency pair at the same time as buying a currency pair. The intuitive effect of hedging is that the floating gains and losses of positions in both directions cancel each other out, reducing the risk exposure of the account. Hedging can lock in losses and lock in profits. It is a way to reduce trading risk while maintaining positions to continue to participate. It should be noted that the hedge order needs to find a suitable unlocking point and make a profit. Otherwise it is like increasing transaction costs. Using low leverage Forex trading is a small game. If you can do it with a small stroke, the risk will naturally decrease. Therefore, when choosing the leverage ratio, try not to choose too high leverage trading. In the case of high leverage, the probability of a burst is greatly increased. A smaller percentage of leverage can have enough funds to fight against the market. Avoiding overnight positions Holding overnight positions will not only generate overnight interest, but more importantly, the evening market will fluctuate greatly. Especially when important data is released in the early morning, if the direction is wrong, it is easy to explode. The same thing to note is that you don't want to hold a position over the weekend, because even if you set a stop loss, it may not work because of a gap. Investors are only the fate of a forced outburst. These unpredictable risks can be completely avoided. Transaction costs that cannot be ignored. Most trading platforms now do not charge commissions to customers. The transaction costs that investors need to pay are just spreads. Even so, this is a fee that cannot be ignored. For some investors who trade frequently, this expenditure is also quite surprising. Less on the order, do a small dot currency, the transaction costs will be the lowest. It can set up a revolutionary breakthrough in the trading system of venture capital. There are many software-specific risk control systems that can automatically calculate the risk funds for you. If you choose a value of 100 US dollars, the risk capital to be borne is 10,000 US dollars. In addition, investors can choose the corresponding amount according to their risk ability. Controlling position control is the most effective line of defense against loss. If 5% is your limit, then there is no doubt that you will live longer in this field, and if you can survive in the foreign exchange, it means victory.


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