Return to some of the concepts

Return to some of the concepts

We have had so far a lot of very important concepts to understand the mechanism of trading, although it is clear concepts it does not have a lot of complexity, it is important to reaffirm it as it represents a cornerstone in understanding the principles of action in trading in global markets.Of the concepts that we have mentioned:
Unit


It can be somewhat less of the commodity traded. Called Lot

Dealing institutions that operate the system with marginal things can be traded in units, each fixed unit called lot.

In our example the product is the car and one unit of which is the one car, which is the minimum you can trade it.No .. Alkhamkink to trade half the car .. But you can trade in multiples of this unit you can trade in any car or threeIn our previous example croaker = one car.

There are institutions that allow you to trade material Soy beans and less by the end of the trading is 5000 Bushel - a unit of weight - that is meager here bushel = 5000. And there are institutions that allow you to trade in gold and is less an end to the trade is 560 ounce croaker that is here = 560 ounces.You can be traded Plaut, two or three and Bamadaafath, and you can not be traded or Plaut Lott half and half.

Contract Size


Is the actual value of the commodity that will allow you to trade by the institution.In our example the product is a car and the actual value = $ 10,000When you buy 1 lot of requests from the agency means that you are required to purchase one car worth $ 10,000 and when you ask Buy 2 Lott, meaning that you are required to purchase two cars worth $ 20,000 (2 * 10,000) and so on ..Contract size varies from one institution to another, one of the basic information Starafha before dealing with the institution that will open the way for marginal trading system.


Leverage

Which is the ratio between the value of the item that you want to be traded and the value of the deposit which asks you to pay (used margin) to allow you to trade in this commodity.

Multiplier can be calculated by the following formula:

Multiplier= The number of contracts per contract size * / margin used

If we assume that the agency will allow you to trade cars a car one (1 lot) valued at $ 10,000 compared to be deducted from your $ 1000 for each lot of margin user .. Can be calculated rate multiplier:

Multiplier= The number of contracts per contract size * / margin used

= 1 * $ 10,000 / $ 1,000 = 10Which can be expressed in any form 1:10 for every $ 1 paid by a user will be doubled as a margin of ten times, ie for every $ 1,000 paid by the user margin you can trade in a commodity worth $ 10,000

Question:I suppose that there is a dealership allows you to trade four cars, each worth $ 10,000 for every $ 1,000 paid by the user how much margin leverage ratio provided by this agency?

Answer: multiplier = the number of contracts * Contract Size / Margin user= 4 * $ 10,000 / $ 1,000 = 40Can be expressed as 40:1 that means that for every $ 1000 be deducted user margin you can trade a commodity worth $ 40,000, equivalent to 4 cars at once.And the percentage multiplier that may be granted to you vary from one institution to another, one of the basic information before handling system Starafha marginal. Used Margin Used Margin


Which is the amount that is deducted from your account temporarily recovered as a token of this item that you choose to trade in, This amount represents a small percentage of the value of the item you Bhdzh institution temporarily pending the completion of the deal .. And you return the to your account after completion of the transaction and regardless of the outcome of the deal is over, whether profit or loss.

Margin is calculated depending on the user to the following equation:

Margin used* = Number of contracts the value of the contract / rate multiplier

You just need to learn the value of the contract with the organization that deals with it and that gives you double the proportion of them to be able to easily find out the amount that the company temporarily St_khasmh of your margin the user.In our example above the size of the contract = $ 10,000 and the proportion is 10 times the multiplier, you can know how much the agency will be deducted from your account that you choose to buy 1 lot of any one vehicle:

Margin used* = Number of contracts the value of the contract / rate multiplier

= 1 * $ 10,000 / 10 = $ 1,000 will be deducted for each lotIf I thought of buying any 3 cars 3 lots, the margin of the user who will be deducted from your account:Used margin = 3 * $ 10,000 / 1000 = $ 3,000, $ 3,000 will be deducted from your account as margin user when you buy 3 cars (3 lots).

Question 1:If we assume that the size of the contract with the organization = $ 20,000 or double the proportion granted to any weakness = 20 20:1 How much margin will be the user who St_khasmh of this institution, if you buy 2 lots?


Answer:Used margin = the number of contracts * contract size / ratio multiplier

= 2 * $ 20,000 / 20 = $ 2,000 will be deducted margin user.

Question 2:On the same hypothesis the former, how much margin will be used if the thought of buying 4 lots of this institution?


Answer:Used margin = 4 * 20.000 / 20 = $ 4,000 will be deducted margin user.

Usable Margin


Which is the amount remaining in your account after the deduction of the margin from user, Which is the maximum amount that allows you to defeat in the transaction.

The main purpose of the margin available is that it is discount in the event of loss, if your trading in the car lost $ 500 will be deducted from your account to complete the full value of the car as we have said.

It is important to know that the institution that deal by which the margin can not allow you to lose in the deal more than the value of the margin available in your account.When you choose a commodity trading margin will be deducted from your account user I. .. This amount will come out of the account as if the transaction does not exist, but in all cases will return to your account after you have finished selling the product.After the user is truncated margin will remain in your account available margin, and this is expressed by the following equation:

Margin available= Equity - Margin user

As you monitor the price of the commodity that you have in the market, the organization that deals with it will monitor the price as well, and as long as the price of the current greater than the price you buy it so that if it decided to sell them immediately would be a winner, you will not interfere with the institution and will leave you the freedom to choose the right price for the sale, but that fell The current price of the commodity price of your purchase so that if it decided to sell at this price will be the loser will not interfere as long as the institution that you have in the margin available to compensate for this loss.But as soon as the difference between the current price of the commodity and the price when you buy them equal to the margin available, will tell you that the deal ends or add more money to your account at the institution until his opponent in the case of continued price decline.If you do not behave yourself and you do not end the transaction and did not add more money to your account, the institution itself will sell the item at the current rate without waiting for an order from you, fearing that the largest price drops without being in your account is offset by the loss.So Valhamc is available which gives you the possibility to take the loss and wait until conditions improve.

From here you will learn the extent that the margin you have available the largest extent that it is best for you.

Take, for example:Suppose that the agency allow the car to trade in a car, at least one value of each car $ 10,000 and the percentage of double 10 timesSuppose you opened an account with this institution the amount of $ 3,000, we will see what will happen if I thought about trading in one car and what will happen if I thought about trading in car:

Trading in one car:If you think that trading a car and one (1 lot) so I bought one car from the institution on a margin, the margin will be used:

Margin used= The number of contracts * contract size / ratio multiplier

= 1 * $ 10,000 / 10 = $ 1,000 will be deducted $ 1000 from your account on a temporary basis

Available margin in your account= Equity - Margin user

$ 3000 = $ --1,000 = $ 2,000 of this amount will remain in your account as margin available, you know that this amount is the maximum amount that could allow you to defeat.If we assume that you went to the market and found that the price of the car has become = $ 12,000This means that if you sold the car at this price you will be able to pay the full value of the car and will remain of value to sell $ 2000 will be added to your account for you as profit (12,000 -10.000)Greed may have to wait a further increase ..But suppose that the price of cars dropped to $ 9000 for the car, meaning that if you decided to sell the car at this price will lose $ 1000 will be deducted from your account at the institution.Let's say you waitedBut the price dropped to $ 8000 more for the car, meaning that if it decided to sell at this price will lose 2000 $ (8000-10.000 = -2000) and this amount will be deducted from your account at the institution.

Here the institution will not allow you to wait for more, and you will be required to sell the car at this price and if you want to wait you must add more money to your account to be able to rival you in case the price falls more.Thus you see that the margin available that you have given you the ability to be patient until he reached the price to $ 8000 per car where I was until this moment able to compensate the difference in the loss of your account. Trading in the case of car:

Suppose you from the start I decided to trade in two cars together, what will happen?The margin of the user who will be his opponent is the following:

Margin used= The number of contracts * contract size / ratio multiplier

= 2 * 10.000 / 10 = $ 2,000 of this amount will be deducted from your organization has a margin user.

Margin available= Equity - Margin user

= 3000 - 2000 = $ 1000 is the available margin, which is the maximum amount you can lose in this deal.Suppose you went to the market and found that the price of the car became $ 12,000 for the car which if you sold the cars at this price you will be able to pay the value of complete and $ 20,000 (2 * 10.000) and will remain in your account the amount of $ 4000 Sathsal them as profit to you ($ 24,000 eighth cars at the market price current - $ 20,000 cars claimed eighth of an institution).There is no doubt that the largest profit in trading profit in the car of a car and trading in one.Suppose you had waited a further increase hope.But the price dropped and became a $ 9500 per car.Here, decided to sell the cars at the current rate you will get $ 19,000 and will be your loss is $ 1000 will be deducted from your account but you will not be able to compensate for the loss in the event the price falls more than that because the amount in the margin you have available is $ 1000 which is the maximum amount you can lose in The deal, so the institution will ask you to sell the cars at the current rate or add more money to your account to be able to wait any longer perhaps re-price rise. If they do not own Foundation will sell the cars and the difference will be deducted from your account, for fear that the price falls more and you can not make up the difference of the institution of your account.Note that in the previous example because the margin available to you have been able to greater ability to be patient until he reached the price to $ 8000 but when it became less available margin can not be patient for more than the price of $ 9500.

All we care about to learn that regardless of the amount of the contracts traded by that apart from the current price of the commodity, the available margin in your account is the maximum amount allowed for you to lose in the deal.So always check the following equation:

(The number of contracts * Price) - (number of contracts * price)> = margin available (greater than or equal to)

If there is some difficulty in understanding the previous equation, it is sufficient to remember:

You can not lose more than the margin available to you regardless of the number of contracts traded by.

Remember that the margin trading system is the only way available to you to get the profits will not be able to get it only if you are multi-millionaires are the fastest way to achieve enormous wealth of the capital in a very negligible and in record time.Remember that this road is a realistic way, legal and legitimate carried out by the millions around the world, as long as I heard them, and after reading this book you will be able to be one of them that were given this area is worth the effort, practice and learn.An area that is without a doubt, is the area that are manufactured millions ..An area that generates the rich.I also hope not to be afraid of the concepts of past and think that you are on the verge of a difficult test in mathematics!!Concepts of the former is very clear and if you find some difficulty in understanding it is because they are new to you, we want to assure you that a little practice you will not need to calculate anything, but will be able to easily and instantly know the used margin and the margin available and everything related to Besafqatk without the need to calculate anything .We also want to assure you and during the actual work in trading the stock exchange will not need to calculate the margin of the user or available margin or profit and loss, will be the expense of all of this automatically you will be able to know the available margin, which you have in every moment and will be able to find out how much your profit and loss at every moment .What we have mentioned earlier concepts and equations associated with them only for reference when you need and you can understand things correctly, it is sufficient to understand the concepts in general and the former at the following you will increase your understanding of the reading and Tdh front of you is more