MEXDa Tong: How to Calculate Trading Positions To you who are new to the foreign exchange market

In trading, we often talk about the issue of position control. As for the necessity of risk control, I don't think it's necessary to go into detail. However, many new traders in the foreign exchange market are still very confused about the "almost 10% position" mentioned in daily life, and even many investors who have been trading for a long time still have misunderstandings about their understanding of positions. In this article, we will focus on discussing these issues in detail.
Regarding prepayments in transactions
foreign exchangeThe most common trading method in trading is margin trading, which uses leverage to deposit corresponding margin for trading. The minimum standard for trading in the foreign exchange market is based on10Ten thousand units is a standard hand. If you use leverage for margin trading, if you open a100A trading account with double leverage means you only need to prepay1000A unit of margin can achieve a standard hand transaction. This is easy to understand. But it should be noted here that,10Ten thousand units may not necessarily be in US dollars, it could also be10This is a common misconception among many traders regarding other currencies of ten thousand.
Regarding changes in profit and loss amounts
Taking the Australian dollar to US dollar as an example, assuming the exchange rate is0.66775Starting from the first number on the left (ignoring decimal points, including0Within)5The number of digits, for each fluctuation of a numerical value, is1Points, such as0.66775Change to0.66785To fluctuate by a point (i.e. to fluctuate)0.0001）And0.66775Change to0.66875It is a change10Points (i.e. fluctuating)0.001）And so on. Calculate based on each standard hand,1The profit and loss amount corresponding to each point is10000*0.0001=10USD.
But if the currency exchange is based on the US dollar, such as the US dollar to Canadian dollar, assuming the exchange rate is1.29422, also the first number on the left from the beginning of the number5Number of digits, for each fluctuation of a value1Points, but at this point1What is the profit and loss amount for each point10000*0.0001=10Canadian dollars, you converted the US dollars into Canadian dollars, so at this point, the gains and losses are all in Canadian dollars.
Regarding the calculation of positions
As mentioned earlier, many traders will say that they only use 10% or0.5Completion position (i.e10%or5%）But in reality, most traders are talking about margin, which is very unprofessional, such as1USD 10000100A double leverage account with 10% of the funds as margin is1000In US dollars, the corresponding trading volume is1Standard hand, withxxFor example, if the currency fluctuates by one point against the US dollar10Profit and loss in US dollars; But if it is200What about an account with double leverage? A 10% position is not enough2Is it a standard hand?, At this point, for every fluctuation20The profit and loss of the US dollar, if the transaction is profitable, everyone will be happy, but if there is a loss, then50Taking a stop loss as an example, in a single transaction,100Double leverage accounts require losses500USD, loss account5%，200An account with double leverage needs to incur losses1000USD, loss account10%。
Of course, this article does not intend to discuss with everyone how many positions are appropriate, which depends on the systems or trading expectations of different traders. There are professional operators specializing in heavy position trading and ordinary radical traders, and positions vary from person to person. What we want to say here is that the calculation of positions based on margin is not scientific. The real way is to calculate based on the profit and loss amount.
For example, every time you trade, you plan to take out1%As risk capital,1A ten thousand dollar account means100Risk funds in US dollars, and at this point, you plan to trade the Australian dollar against the US dollar and25A stop loss is a point, at which point your position should be100dollar/25spot/10USD (single point profit and loss)=0.4Standard hand. Overall, these things are very basic, but extremely important, and every newcomer to the foreign exchange market should focus on mastering them. Only by understanding the logic behind this can you calculate a trading position that truly suits you. Many traders only know the importance of position control, but when it comes to operation, they rely entirely on their intuition to enter the market. Some even believe the theory that less than 20% is a safe position, but do not know that they enter the market randomly according to this theory. In the end, they find that the actual loss of funds far exceeds their expectations.
Learn more detailed knowledge, Jia Weieirc918888[sub][/sub][sup][/sup][strike][/strike]