Resistance Function Margin Leverage

For example, your initial capital deposit of $ 300. If you open a position trading mini lots (10000) requires margin: 10000 (mini lots) x 0002 (leverage 1:500) = $ 20. So while capital is held as collateral (margin) to open a mini lot gbp / usd is $ 20. So the rest of your margin to hold losses were: $ 300 - $ 20 = $ 280.
Profit from currency gbp / usd for mini lot (10000) is $ 1 per point (pip). So with the example above (the remaining margin is $ 280) can be calculated force you to hold losses was $ 280 (the left margin) divided by profit per point (pip) = 1 is: 280 / 1 = 280 points. So the strength to withstand the maximum loss (before the margin call) is 280 points with the assumption that the currency you use is the gbp / usd with a profit $ 1/point.
Compare with 1:100 leverage, which means you must provide a capital margin of 10 000 x 0.01, namely: $ 100 for opening a position mini lots (10000) currency gbp / usd. Margin is left to hold losses is 300-100 = 200. Profit per point gbp / usd mini lot is $ 1. So your strength to hold losses are 200 / 1 = 200 points only.
In conclusion: Leverage function doubles the value of your profits with a relatively small initial capital, while increasing your strength hold losses.
Profit Target, Stop Loss and Trailing Stop Target profit is an order to liquidate a position automatically at a certain price when the trader has received a number of profit.

    * When Buy / Long position, the target is located at THE price of your open position Buy / Long.
      (Note! Open Buy / Long using ASK price, while Target or Stop Loss based BID)

      Example: Buy EUR / USD 1.2000, 1.2050 Profit Target (to target 50 points profit)

    * If you Sell / Short located BELOW the target price you are open positions Sell / Short.
      (Note! Sell / Short uses BID, Target or Stop Loss is based on ASK)

      Example: 
Sell EUR / USD 1.2050, 1.2000 Profit Target (to target 50 points profit)
Stop Loss is an order to liquidate a position automatically at a certain price to limit losses that might occur if the market moves against the trader's position.

    * When Buy / Long position, stop loss is located at a position opening price DOWN Buy / Long.
      (Note! Open Buy / Long using ASK price, while Target or Stop Loss based BID)

      Example: Buy EUR / USD 1.2050, Stop Loss 1.2000 (stop loss 50 points for loss)

    * If you Sell / Short then the stop loss is located at THE price of your open positions Sell / Short.
      (Note! Sell / Short uses BID, Target or Stop Loss is based on ASK)

      Example: Sell EUR / USD 1.2000, Stop Loss 1.2050 (stop loss 50 points for loss)
Stop Loss can also serve to protect the profit that you have obtained (lock profit). To do that is by changing the position of stop loss to the top (to Buy) or down (to Sell).
Example: A trader Buy at position 2.0000, TP (Take Profit) at the level of 2.0050, SL (Stop Loss) at the level of 1.9970. After some time, prices have moved in the expected direction (up) on the position of 2.0040. In this case the trader is located on floating profit position (open position and in a state of profit) by 40 points. To protect profits by 20 points, the trader can move the stop loss on open price + 20-point, ie 2.0020. Why 20 points? Condition is the profit you want to lock, must be smaller than the current floating profit (20 <40 points). When the floating profit then moved to 60 points, the trader can raise more stop loss to 2.0040 to lock profit position by 40 points, and so on. This is the basis of a trailing stop.
After entering Take Profit and Stop Loss, then the data will be stored on the server Forex Broker. So you do not have to worry about and can always turn off the computer / internet connection disconnected. Take Profit and Stop Loss will continue to function WITHOUT must turn the computer on and connected to the internet via a forex broker
Stop Loss Profit Target Position Buy (Long) Higher than Open Price (based on bid price) Lower than Open Price (based on bid price) Sell (Short) Lower than the Open price (based on offer price) Higher than Open Price (based on offer price)
Trailing Stop is a facility provided by the forex broker that can change the stop loss to lock in profits automatically in multiples of a certain amount. Trailing Stop is an extension of stop loss.
Trailing Stop is generally only works when the trader's position HAS PROFIT MORE THAN THE MINIMUM VALUE OF CERTAIN designated broker (eg minimum 15 points). (IMPORTANT: Generally trailing stop running locally on your computer, not on the server broker! If your computer dies, trailing stop also become inactive)
So if you do not profit more than the minimum amount that you set a trailing stop, it means that your position is still DANGEROUS (unless you have been using stop loss). So you should set a stop loss first, then if necessary you can add a trailing stop as a complementary feature. By using this feature you will avoid profit loss if you have exceeded the minimum trailing stop.
Example: Buy EUR / USD 1.2050, 1.2000 Stop Loss, Trailing Stop 15 points. If the BID is now located at 1.2070 (had 20 points profit) then the trailing stop will adjust stop loss to 1.2055 price (20 points minus 15 points profit, ie profit +5 points). That means your profits have been locked 5 points (on the position of new stop loss is at 1.2055).
Point A: And when the price was moving down to 1.2055 then automatically be terlikudasi at profit of 5 points. That means you have no possible loss again because it has been locked.
But if the price does go down (as per point A) but prices continue to rise from 1.2050 to 1.2095 (had 45 points profit) then the trailing stop will adjust stop loss to 1.2080 price (45 points minus 15 points profit, ie profit +30 points). This means that you have locked profit of 30 points (on the position of new stop loss is at 1.2080).
Margin Call Margin call means the liquidation of the "force" conducted by the broker because your account does not have sufficient funds to cover / cover your position are the losers.
Basis for determining the Margin Call is usually there are 2 (dependent regulation of each broker):

   1. Margin Level
      System-level margins are used on MetaTrader platform. (Please do order with a demo account that you better understand the calculation of margins on MetaTrader platform)

      The formula for calculating the margin levels are:

      Level Margin = Equity / Margin used

      Equity = Margin + Free + Profit Margins - Loss

      Balance = Capital actual current (not yet reduced the profit & loss)

      Equity is your balance after the plus / minus profit & loss

      At the moment all positions clear (no open), then the Balance = Equity. Because the margins are not used = 0, Profit / Loss = 0, so the Free Margin become equal with Balance. (See Equity formula above!). Free Margin is money you can withdraw if there positions open (reserving funds sufficient free margin to hold losses and prevent Margin Call)

      For example, the broker determine Margin Call occurs if Margin Level 5% (example: FCMarket.com), then when "The margins are not used" x 5% = Equity, a margin call will occur. (One at a time of open positions will be closed automatically by the broker to trader sufficient funds to cover the loss).

      In MetaTrader platform, a trader does not need to calculate the Margin Level manually, because if there are open positions Margin Level will automatically appear on Tab "Trade" in units of percent (%). Traders need to do is to keep the margin level is not close to the limit Margin Call broker. (Eg 5%)

   2. Initial capital - Margins - Loss = 0
      There are also brokers who set a margin call if the initial capital - used Margin - Total Loss = 0. (This also can you imagine that the broker is using the Margin Level 100% when using MetaTrader calculation)

      Deposit the initial capital of $ 300. If a trader opens a position trading GBP / USD mini lots (10000) requires margin: 10000 (mini lots) x 0002 (leverage 1:500) x 2.0000 = $ 40. So while capital is held as collateral (margin) to open a mini lot gbp / usd is $ 40. So the rest of the margin trader to hold losses were: $ 300 - $ 40 = $ 260

      When the floating loss (loss) you reach $ 260 then there is no margin / money left over to hold losses, so one by one your position will be closed automatically by the broker. Then the margin of $ 40 is locked temporarily as collateral for a position open GBP / USD, will go back into your account after that position clear / close so that your margins remaining $ 40 only).
Calculation of Interest / Swap / Rollover / Interest Stay Interest / Swap / Rollover / Interest of Stay is interest earned or to be paid the trader if there are open positions exceed 1 day of trading. 1 day trading is that if the position is not closed until the time of closing the world Forex market, namely when the New York market closing at 17.00 (New York time).
To convert the time in New York to your local time, please go to: http://www.timeanddate.com/worldclock/timezone.html?n=179
When trading forex, which used the actual day is 2 days ahead. Example: Trading on Thursday, then the actual day is Monday (interest calculated as 1 day). Trading on Friday, then the actual day is Tuesday (computed interest rate of 1 day), and so on. While special for the day Wednesday, the day actually was 3 days, namely Friday, Saturday and Sunday. (Interest is calculated 3 days). Although Saturday and Sunday closed the forex market, interest is calculated in 3 days as compensation for holiday trading.
In the interest calculation: Traders will get a positive rate if the currency purchased an interest rate greater than the borrowed
Example: Pair USD / JPY. USD Swap Rate = 5.25%, Interest Rate = 0.5% JPY Buy USD / JPY means a trader is buying USD JPY by borrowing. Because interest rates bought currency (USD) greater than borrowed (JPY), the trader will get the interest of: 5.25% - 0.5% = 4.75% If a trader Sell USD / JPY (mean borrowing USD and buy JPY), then will be charged at: -5.25% + 0.5% = -4.75%
Example 2: Pair EUR / USD. Interest Rate = 3.75% EUR, USD Swap Rate = 5.25% Buy EUR / USD means a trader buys EUR USD by borrowing. Because the interest rate currency purchased (EUR) is smaller than borrowed (USD), the trader will be charged at 3.75% - 5.25% = -1.5% If a trader Sell EUR / USD (meaning buying and borrowing USD EUR) , then it will get the interest of: -3.75% + 5.25% = 1.5%
Any Forex Brokers typically provide lists interest rates (per day) for each pair is used. The list usually includes interest charged to posis Buy and Sell. (Either in $ or in point). If the point the trader must first convert into dollars by calculating the value per point pair in question.
Hedging Techniques Hedging is a situation where we open 2 opposite positions in the currency and the same number of lots. Often hedging is used when prices turned south and traders did not want to grow large losses without cut loss (closed position despite loss.) In general, they use this technique without a stop loss. Another term of the hedging is locking.
Example:
A trader Buy EUR / USD 1 lot and the price did not move as expected (down) and the position is still floating loss (loss of floating) 20 points, the trader can open Sell EUR / USD 1 lot in the same currency so that losses is locked only 20 points. Although the price moves in any direction, floating loss remained 20 points
Average Technique Averaging is one way to minimize losses by opening a similar position at a different level. The purpose of this averaging is to use the average of the differences in price levels are perpetrated in order to minimize loss.
Example: 
A trader Buy EUR / USD 1 lot at 2.0100 price, but the price moves down to as low as 2.0000 so that the experience floating loss -100 points. Trader can do by opening a position averaging Buy EUR / USD 1 lot at 2.0000 on the spot price. This means there are 2 open positions. The first floating loss position -100 points. The second position is 0 point. (Assuming without taking into account the spread).
If then the price moves up towards 2.0050, the first floating loss position -50 points, second place 50 points profit. In total the two positions are break-even (BEP). When the price moves up above the 2.0050 level. It means that the trader has a profit.

Resistance Function Margin Leverage 2011-01-31T17:00:00+07:00 Rating: 4.5 Diposkan Oleh: masterprofit