Elementary Training

What is Forex?

1、What is Forex?

The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies.Also known as international exchange, exchange one country’s currency into another country’s currency, the means of payment for international settlement and credit instruments. The main varieties of foreign exchange are hard currency and soft currency. Soft and hard relatively changes with the economic situation of a country.

Hard Currency: Steady exchange rate in international financial market, free exchange, and the stability of the currency, can be used as a means of payment or means of circulation of international currency, such as the eight major international currencies USD, AUD, EUR, GBP, CHF, JPY, NZD, CAD, these currencies trade frequently and contain huge turnover volume in market.

Soft currency: Exchange rate of these currencies are unstable in international financial market. They are not freely convertible and with low currency credit level, such as the INR, VND etc.

2、What is Forex Trading

Foreign exchange transactions refer to transactions in the foreign exchange market where investors use the exchange rate between currencies and buy a currency in a group of currencies to sell another currency.

For example, when you expect EUR / USD to appreciate, you will buy EUR / USD, which means you bought EUR and sold USD.

In the foreign exchange market, the most popular 10 pairs of currency pairs are: EUR / USD, USD / JPY, GBP / USD, AUD / USD,USD / CNN, USD / RUB ,USD/NZD,USD/MXN,UAD/CHF,UAD/CAD.

3、What is Forex Margin Trading

Foreign exchange margin trading refers to: investors trade with the trust of foreign exchange transactions provided by banks or brokers . In the transaction, it makes full use of the principle of leveraged investment, with small broad, investors and brokers signed a contract to buy and sell foreign exchange, just pay a certain margin can be 100% of the amount of transactions.

For example, when you make a foreign exchange margin trading in a company, you expect the EUR / USD to appreciate, assuming a leverage ratio of 1: 100, or a margin of 1%. When you buy EUR EUR for a standard unit, The principal needs $ 100,000, and you actually only need to pay $ 1,000.

4、History and Current Status of Forex Margin

Bretton Woods system established in 1944, US dollar became the world’s unique reserve currency, fixed exchange rate system appeared;
In the 1970s, foreign exchange margin transactions in London have taken shape, because the need for a lot of principal to carry out transactions, so mainly banks and large financial institutions and government participation;
The collapse of the Bretton Woods system in 1973, the collapse of the fixed exchange rate, was replaced by the floating exchange rate system;
In 1974, the British financial markets began to provide liquidation and gold trading, personal foreign exchange market began to emerge;
In the mid-1980s, the form of electronic forex trading became popular, that is, Reuters Dealing, developed by Reuters;
In the late 1990s, foreign exchange margin was introduced into the United States, Hong Kong, China and Japan, and became the first financial product for investors in the Japanese market.
Opened online trading in 1996, foreign exchange transactions began to open to the majority of retail traders, foreign exchange margin traders continue to increase the number.
2013 BIS report shows that the United States, Britain, Japan, Singapore, foreign exchange transactions accounted for 71% of the world.

History and Current Situation of China’s Foreign Exchange Market:
In 1994, China Securities Regulatory Commission comprehensively banned foreign exchange futures trading and margin trading;
In 2000, with the development of information technology and the relaxation of domestic policies, the international well-known foreign exchange companies and brokers began to promote in the country, foreign exchange margin business gradually developed in the country;
2004 China Banking Regulatory Commission, “Interim Measures for the Administration of Derivative Transactions of Financial Institutions”, the provision of financial derivatives is a financial contract, banks can carry out new financial derivatives business, without additional approval;
In 2006, CCB, Bank of Communications, Bank of China, China Merchants Bank, people’s livelihood, etc. have launched foreign exchange margin business;
In 2008, China Banking Regulatory Commission issued a circular banning and prohibited bank financial institutions to start the establishment of foreign exchange margin business;
2016 CCTV financial program special report said foreign exchange margin business has become the third largest “wealth opportunity”, the domestic foreign exchange trading average annual growth of more than 70%. European financial advisory firm Cite Group report shows that the world’s top ten foreign exchange brokers, almost half of the income from Chinese investors, China and India to participate in retail foreign exchange transactions accounted for about 7% -8% of the global foreign exchange market transactions, average daily trading volume of nearly 400 billion US dollars. China’s foreign exchange practitioners, brokers, market size, the number of investors blowout.

5、Formation of Forex Market

Foreign exchange market, refers to the international exchange in foreign exchange transactions, foreign exchange supply and demand of trading venues. Its function is to operate the currency commodity, thus the currency of different countries.

1.International trading, investment, tourism and other economic exchanges, in order to pay abroad, must first buy foreign currency in their own currencies, so that the occurrence of domestic currency and foreign currency exchange problems.

2.Speculation – the priceor exchange rateof the two currencies the Western central bank for the implementation of foreign exchange policy, the impact of foreign exchange rates, often trading foreign exchange.

3.Hedge – due to fluctuations in the exchange rate between the two related currencies, those who have foreign assets (such as factories) to convert these assets into the national currency, it may suffer some risks. When the value of foreign assets in foreign currency is not changed for a period of time, if the exchange rate changes, the value of the asset in domestic currency will be profitable. The company can hedge this potential profit and loss by hedging. Offsetting the gains and losses of foreign currency assets arising from changes in exchange rates.

The foreign exchange market is a cash interbank market or a trader’s market. It has no physical place for trading. The transaction is carried out by telephone and via computer terminals around the world. The direct interbank market is qualified by foreign exchange clearing Of the transactions, their transactions constitute the overall foreign exchange transactions in large transactions, these transactions created a huge foreign exchange market transactions, but also to make the foreign exchange market as the most liquid market.

The foreign exchange market is the world’s largest financial market, according to the 2016 BIS three-year central bank survey, the foreign exchange market, the average daily trading volume of 5.1 trillion US dollars. (Note: BIS three-year central bank survey is the global foreign exchange and OTC derivatives market size and structure of the most comprehensive and most authoritative source of information)

6、Main Forex Markets in world

There are eight major foreign exchange trading centers in the world, followed by: UK – London, USA – New York, Japan – Tokyo, Singapore, Switzerland – Zurich, Hong Kong, Australia – Sydney, France – Frankfurt. While London is the world’s largest foreign exchange trading center.

7、Main participants in Forex Market

National central banks, commercial banks, investment banks, brokers (foreign exchange dealers), multinational corporations, fund companies, individuals
To sum up is: the central bank, liquidity providers, brokers, end customers

8、Advantages of Forex Market

  • -24 hours trading: due to the major global financial center location is different, so there will be time difference, but the relationship between the time difference but to promote the foreign exchange market formed a 24-day operation of the huge market. Only Saturday, Japan, and major national holidays will be closed.
  • -Liquidity is huge: the foreign exchange market is the world’s largest financial trading market, daily turnover of up to 5.1 trillion US dollars, far more than stocks, futures and other financial markets.
  • -Virtual market: the foreign exchange market is an invisible market, through the communications network equipment and electronic computers to trade, in any one place, you can phone, mobile phones, computers, pad electronic equipment, in the case of global network connectivity Trading, trading quickly and accurately.
  • -Two-way trading: both long and short bull market bear market can be traded.
  • -Lever mechanism: you can invest through the magnification of small money
  • -Low transaction costs: foreign exchange transactions do not charge fees, compared to other, the lower the cost.
  • -Fair and transparent: the foreign exchange market trading volume is huge, the highest liquidity of the capital market, any individual, institutional and even the country can not manipulate, all financial news through the official government at the same time the world release, which makes it the world’s most fair and transparent market.

9、Transaction Time of Forex Market

Region Forex Market Transaction Period(GMT+8)
Oceania Wellington 04:00——12:00
Sydney 06:00——14:00
Asia Tokyo 08:00——14:30
Hong Kong 09:00——16:00
Singapore 09:30——16:30
Europe Frankfurt 15:00——22:00
Zurich 15:00——22:00
Paris 15:00——22:00
London 15:30——23:30(Standard time16:30——00:30)
North America New York 20:00——03:00(Standard time21:00——04:00)
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Strategy for Novice

1、 What should novice be aware of?

1) Before entering the foreign exchange market, be sure to have a correct sense and value, can not depend on luck in foreign exchange trading. It is not based on gambling. Investors entering the foreign exchange market do not familiar with market, will finally misled from the right direction;
2) Have a reasonable budget, investment funds as a venture capital, foreign exchange transactions can not guarantee 100% gain, so do not let investment fundsaffect the normal life and financial budget ;
3) Before investing with real money, investors should not only build their own trading model, but also start the simulation of the transaction. This kind of simulation transaction must be regarded as a real account, must be meticulously engaged in the transaction, so that you will pay less tuition in future real transaction;
4) When setting up capital investment, be sure to understand the possibility of profit and loss, do not let your account overload. Because foreign exchange transactions can enlarge the amount of money control, usually the ratio is 100: 1. Meaning that 1000 dollars can control 100,000 dollars then the function of this money amplification is like a double-edged sword, high returns accompanied by a huge risk. So prudent investors usually control each of the maximum losses within 5%, the profit will be stable and long-term;
5) Stop loss to reduce the huge losses
When you do the transaction at the same time should establish a tolerable range of losses, the use of stop loss to reduce losses and will not be a huge loss, the loss range set by the account funds, the best set in the account total 3-5% The amount has reached your tolerance limit, do not find an excuse to try to desperate to wait for the market turn, should immediately close your positions;
6) Establish an effective trading system for their own
What is a trading system? From a simple concept, the trading system is a three-dimensional system of business thinking. System trading thinking is a concept, which is reflected in the analysis of the price of the overall movement of the price of observation and observation of the continuity of time, expressed in the decision-making characteristics of the transaction object, trading capital and trading investors this Three elements of a comprehensive expression. There are a lot of content about system trading thinking, no matter you are novice or veteran, always use a variety of different ways, systems, strategies, through the speculative product price fluctuations to earn income. Each trading system also has his strengths and weaknesses. The key to win the speculative market is to develop a simple trading system and strictly follow the rules of the transaction.

2、 How to elect Forex Platform with good quality?

1) Regulation; whether it is one of the three largest global financial regulators (ASIC, FCA, NFA)
2) Financial security; platform for the overall strength, net assets, reputation, etc .;
3) Whether the deposit situation of the platform is normal and convenient;
4) The stability of the transaction; whether the regular chuck, slippage, dropped, the market when the tone of the response, whether the offer is delayed or repeated quotes, orders and the implementation of the delay is too large;
5) Liquidity; platform liquidity is good, good liquidity, low spreads, low transaction costs;
6)Customer Service; timely and reliable customer service is very necessary, if the platform disconnection, whether it can contact customer service in time to open the phone; customer service in the shortest possible time for customers to solve transaction problems.

3、 Three Financial Regulation Institutions with highest standard in the world

ASIC
Official website:http://www.asic.gov.au/
ASIC (Australian Securities and Investment) The Australian Securities and Investment Commission, established in 2001, is legally independent of the company, investment behavior, financial products and services to exercise regulatory functions.

Regulatory functions:

1) ASIC authorized enterprises engaged in consumer credit activities, including banks, credit cooperatives, financial institutions, etc., and to ensure that the relevant norms under the license validity, including the responsibility of consumers. This is the 2009 National Consumer Credit Protection Act.
2) As a market regulator, ASIC evaluates how to effectively authorize financial markets and assess fair and orderly and transparent operations that financial markets follow their legal obligations. On August 1, 2010, the Australian Securities and Investments Commission (ASIC), under the auspices of the Australian Government, undertakes the regulation of the normal operation of market licensed trading stocks, derivatives and domestic futures markets.
3) as a financial services regulator ASIC license and monitoring of financial services enterprises to ensure that they are effective, honest and impartial operation. These businesses are engaged in the business of pension insurance, funds, stocks, and corporate securities, derivatives, and insurance services.

Suppliers who are subject to ASIC regulation, who have the qualifications to trade financial derivatives (to provide financial product advice, to trade financial products, to market for financial products, to operate registered financial services, to provide custodian or deposit services) must also have Australian financial services License number (AFSL) and Australian registered company code (ACN).

AFSL: Australian Financial Services License, 6-digit number.
ACN: Australian Company Number, 9-digit number.
ABN: Australian Business Number, 11 digits, 2 digits + CAN number, for tax returns.

FCA
Official website:Regulatory functions:

Responsible for the regulation of banking, insurance and investment, including securities and futures. The Financial Services Authority (FSA) and the Bank of England (BOE) are affiliated with the Ministry of Finance, FSA is responsible for financial business management, and BOE main task to maintain financial stability.

The UK is the world’s finest and most financially financially qualified country and regulates all financial services institutions registered in its territory through the Financial Services Authority (FSA).

Regulatory query:

1) British FCA regulation is divided into three levels, these three levels which must be the highest level of regulation to be effective.

  • Authorization status can not be an EEA license
  • Able to hold clients’money

2) The platform for regular FCA regulation is the UK Financial Services Compensation Scheme.

NFA
Official website:
http://www.nfa.futures.org/
In December 2000, the United States passed the Futures Modernization Act, which requires all foreign exchange dealers to be registered as Futures Commissioners (FCM) at the American Futures Association (NFA) and the US Commodity Futures Trading Commission (CFTC) The day-to-day supervision of the above institutions, which are not eligible or are not approved by the parties, will be ordered to cease to operate. The introduction of this bill, making the network foreign exchange margin trading onto the track of the development of norms.
NFA is an industry self-regulatory organization. In contrast, the US investment industry is more mature and standardized, so many investors in the choice of margin brokers when the first thing to look at is: whether the agency is registered and accepted in the NFA management, but also query the agency business process Have bad records and other public information. This measure provides a convenience for individual investors to understand the reputation of the trader and play a more important role in the project to reduce the risk.
The National Futures Association (NFA) is a self-regulatory organization of futures industry established in 1976 under the provisions of Section 17 of the Commodity Exchange Act, a nonprofit member organization. September 22, 1981, CFTC accepted NFA officially became a “registered futures association”, October 1, 1982, NFA officially began operation.

Regulatory functions:

1) Audit and supervise members must meet NFA’s financial requirements;
2) to develop and enforce the rules and standards for the protection of the interests of customers;
3) Arbitration of disputes relating to futures;
4) Approval of NFA membership, Futures Agency (FCMs), Introducing Broker (IBs), Commodity Trading Consultant (CTAs) and Commodity Joint Venture Fund (CPOs) can be members of NFA.

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4、How does platform connect with bank?

End customers include institutional investors, funds, individual investors, want to order and international banks docking, but because the amount of money is too small to be achieved, so with brokers Broker to close orders. But not all brokers are able to dock directly with banks to obtain bank quotes, so the liquidity provider LP is required to provide liquidity for brokers – that is, the real-time quotes of the banks, but the quotations made by LP are made through PrimeBroker , That is, will be a number of large banks such as Deutsche Bank, JP Morgan Chase, Citibank, HSBC, BNP Paribas and other quotations together.
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5、How doesorder executed?

As shown in the right figure, in STP-ECN mode, the ECN collocation system will first send the quotation instruction to the MT4 terminal server. The customer will see the quotation on the MT4 and enter the ECN system through STP bridging technology ,ECN matching system brought all the quotation of liquidity providers togethersuch as international banks, non-banking institutions, hedge funds, etc., and thus entered the ECN trading environment, customer orders, will be automatically selected matching, real-time transactions.

6、How to identify STP-ECN and MM Platform?

There are two types of online forex trading platforms: Dealing Desk (DD) and No Dealing Desk (NDR).

(DD) Platform, is also called Market Maker (MM).
(NDD) Platform can be broken down into STP-ECN, STP, DMA / STP.

MM usually has a trading platform or a processing platform (Dealing Desk) to handle the order, and the spread type is set to fixed. And through the spread to profit, when needed in the opposite direction with the customer transactions. In other words, when the trader wants to buy, the market maker sells to the trader, and when the trader wants to sell it, the market maker buys it, and the mall is always in the opposite position of the trader , In contrast to the trader’s position. Traders see that the bid price is not the same as the actual price of the interbank foreign exchange market. In order to complete the order of the trader, the market maker has the opportunity to reverse the transaction to control the price when needed. Because the market maker can control the price, so if the market maker to set a spread to the fixed, the risk is very small.

Of course, as a trader, it is not surprising that market makers can control these, because the competition among foreign exchange brokers is very intense, so the price offered by market makers is very close to the Interbank Market, The price, if not exactly the same. In addition, the existence of market makers to allow small and medium-sized investors can also participate in the foreign exchange market, the prevalence of its existence is inevitable, it is the market makers to promote the rapid development of foreign exchange retail market.

The STP-ECN platform, it is the customer orders directly anonymous hanging in the international real foreign exchange market transactions. In the ECN environment, various participants, including liquidity providers such as banks, hedge funds, non-banking institutions, and retail customers, are concentrated in the ECN environment, and the liquidity provider sends the competitive offer to the ECN system , to form trading opponents with retail customers, the greater the number of liquidity providers, the better liquidity, customers will be able to get the best market real offer, the more the order of the transaction. In the ECN model, the customer can also see the depth of the order, thus able to see the other players of the purchase and sale orders, and to make the transaction more accurate. In the STP-ECN trading mode, spreadsare floating , customer orders automatically match the transaction, usually no recurring offer.

7、How to use MT4 Trading Platform?

1) MT4 platform PC Operation Guide

2) 2) MT4 Mobile Terminal Guide

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Forex Calculation

1、Cross Exchange Rate Calculation

The dollar as the intermediary currency, the dollar in the exchange rate of the two currencies in which the location of the three cases:

  • The dollar is the base currency (crossed out)
    Known: USD / CAD: 1.31583–1.31608USD / CHF: 0.99905–0.99935
    What is the exchange rate of CAD / CHF ?
    Buy price = 0.99905 / 1.31608 = 0.75911
    Selling price = 0.99935 / 1.31583 = 0.75948
  • The dollar is settlement currency (crossed out)
    Known: EUR / USD: Buy Price 1.06432 – Sell Price 1.06464
    GBP / USD: Buy Price 1.24890 – Sell Price 1.24924
    What is the exchange rate of EUR / GBP ?
    Buy price = 1.06432 * 1 / 1.24924 = 0.85197
    Selling price = 1.06464 * 1 / 1.24890 = 0.85246
  • The dollar is the base currency in the exchange rate of one currency and the settlement currency in the exchange rate of the other currency. (Multiplied by the same side)
    Known: GBP / USD: Buy Price 1.24968 – Sell Price 1.25021
    USD / JPY: Buy Price 120.102 – Sell Price 120.201
    What is the exchange rate of GBP / JPY ?
    Buy price = 1.24968 * 120.102 = 150.089
    Selling price = 1.25021 * 120.201 = 150.276

2、Profit / Loss Calculation

  • The settlement currency is a direct quotation for the dollar
    Profit and loss = (selling price – purchase price) * lot * contract unit
    Example: Know that the customerbrought 2 lots at 1.06586 EUR / USD, the day after the EUR rose to 1.06655 immediately after all closed. Findthe customer’s profit and loss?
    Profit and loss = (1.06655-1.06586) * 2 * 100,000 = 138 USD = profitability
  • The base currency is an indirect quotation for the dollar
    Profit and loss = (selling price – purchase price) / open price * lot * contract unit
    Example: Know the customer at 113.732 (sold) 5 lots with USD / JPY, and then in the 112.521 price when you buy 5 lots USD / JPY. Find the customer’s profit and loss.
    Profit and loss = (113.732-112.521) /112.521*5*100,000=5381.2 USD = profit
  • Settlement currency base currency is non-US cross pairs
    Profit and loss = (selling price – purchase price) * cross currency settlement currency / dollar exchange rate * lot * contract unit
    Example: Known that customer sold 10 lots EUR / GBP at 0.85160 and then buy 10 lots of EUR / GBP at 0.85012, and GBP / USD exchange rate is 1.23405 for customer profit and loss
    Profit and loss = (0.85160-0.85012) * 0.85012 / 1.23405 * 10 * 100,000 = 1019.5 USD = profit

3、Overnight Interest Calculation

Overnight interest = annual interest rate difference / 360 days * 1 standardlot contract unit * lots * exchange rate (long /short) * interest rate days

  • The dollar is a direct quote for the settlement currency
    EUR / USD: Assuming the customer is 0.1 lot account, buy 5 lots with EUR / USD on Monday, the market price is 1.06638 / 1.06659, the position overnight to Tuesday, the interest margin is PrmBuy0.56%, then the euro customers to buy overnight interest :
    0.56% / 360 * 0.1 * 100,000 * 5 * 1.06659 * 1 = 0.83 USD
  • The dollar is an indirect quote for the base currency
    USD / JPY: The market price is 113.651 / 113.680, the position is overnight to Tuesday, PrmBuy-2.16%, then the customer sells the dollar overnight interest is:
    -2.16% / 360 * 100,000 * 1 * 1 = 7.22 USD
  • Crossed
    For example: EUR / GBP: Assuming the customer is 0.01 lot account, buy 5 lots EUR / GBP on Wednesday, the market price is 0.85243 / 0.85275, overnight to Friday, PrmBuy-2.13%, then the euro to buy the customer’s overnight interest is:
    -2.13% / 360 * 0.01 * 100,000 * 5 * 0.85275 * 3 = 0.151 GBP

Calculation of interest days:

Monday: 1 day overnight interest. Monday trading, Wednesday settlement, Monday positions to Tuesday, the settlement date for Wednesday to Thursday, so to pay 1 day interest;
Tuesday: 1 day overnight interest. Tuesday trading, Thursday settlement, Tuesday positions to Wednesday, the settlement date for Thursday to Friday, so to pay 1 day interest;
Wednesday: 3 days overnight interest. Wednesday trading, Friday settlement, Wednesday positions to Thursday, the settlement date for Friday to next Monday, so to pay 3 days of interest; so every Thursday, plus or minus overnight interest will be 3 times the normal day, Because every two days on Saturday and Sunday;
Thursday: 1 day overnight interest. Thursday trading, next Monday settlement, Thursday positions to Friday, the settlement date for next Monday to next Tuesday, so pay 1 day interest;
Friday: 1 day overnight interest. Friday trading, next Tuesday settlement, Friday positions to next Tuesday, the settlement date for next Tuesday to next Wednesday, so pay 1 day interest.

*In accordance with international bank practice, foreign exchange transactions in the two trading days after the settlement, overnight interest settlement by settlement date.

4、Pips Calculation

Pip value
Pip value is the valuebetween the buy price and the selling price when making the foreign exchange transaction. The value depends on the transaction size.
Pip value calculation:Pricing Currency Description: The currency in the currency pair is the denominated currency, for example: USD / CHF CHF is the denominated currency.

Basis Description:Regular currency pairs, the fourth decimalplace is the base pip(0.0001), for example: EUR / USD 1.10687
Japanese currency pairs, the second decimalplace is the base pip (0.01), for example: USD / JPY 113.261
For actual gold, first decimalplace is the base pip(0.1), for example: XAU / USD 1213.59
In short, in the Origin five digit quotation system, the penultimate digit as the basepip.

Pip value calculation formula:
Pip value = Contract Size * Tick Size * Valuation Currency Rate (Quote Currency Rate)

Examples are as follows:

1.Assuming that the current exchange rate for USD / CAD is 1.30681, the customer has a standard lot for each transaction,
USD / CAD pip value = 100,000 * 0.0001 * (1 / 1.30681) = $ 7.652

2.Assuming that the current exchange rate of GBP / USD is 1.25169, the customer has a standard lot for each transaction,
GBP / USD pip value = 100,000 * 0.0001 * 1.25169 = $ 12.5169

3.Take GBP / JPY as an example:
Assuming GBP / JPY current exchange rate is 139.485, USD / JPY current exchange rate of 113.261, the customer per transaction a standard lot, the pip value is:
GBP / JPY pip value = 100,000 * 0.01 * (1 / 113.261) = $ 8.829

4.to GBP / NZD example:
Assuming GBP / NZD current exchange rate of 1.71082, NZD / USD current exchange rate of 0.72001, the customer per transaction a standard lot, the pip value is:
GBP / NZD pip value = 100,000 * 0.0001 * 0.72001 = $ 7.2001

5、Margin Calculation

Margin is calculated by the following formula:
Margin = Lots * Contract Size * Market Price / Leverage

For example:
If you wish to open a order with the quantity of 0.1 lot (1 lot contract size is 100,000 base size) based on the EUR/ USD current price (1.35645), and the account leverage is 400 times, the calculation formula of your required margin is as follows:

(0.1x 100000x 1.35645) / 400 = $33.91
In this example, the required margin of the next 0.1 lot of order is USD 33.91, so you can open the position successfully when the available margin in your account is at least USD 33.91.

For USD/ JPY, if USD is the currency pair of the basic currency, the required margin is directly Trading Volume / Leverage.

If the above investor takes long of 1 mini lot of USD/ JPY in the 99.80 position, the used margin (fixed) during the order transaction is:

Margin = 1 Lot * 10,000 (Contract size) * 1 (Market Price) / 100 (Leverage) = 100.00 (USD)
Moreover, when the trader takes short of 1 mini lot of USD/ Swiss Franc currency pair in the 0.9460 position on Origin platform, due to the direct trade market price of element (USD) is 1, the used margin amount (fixed) of the user during the order transaction is:

Margin = 1 Lot * 10,000 (Contract size) * 1 (Market Price) / 100 (Leverage) = 100.00 (USD)
The following are some margin calculation formulas of FOREX cross trade and gold products:

For example, when Client A takes short of 2 mini lots of AUD / JPY in 102.20 position on Origin platform, and meanwhile the quotation of direct trade AUD / USD is 1.0304, the used margin of Client A during the order transaction is:

Margin = 2 Lots * 10,000 (Contract Size) * 1.0304 (Market Price) / 100 (Leverage) = 206.08 (USD)

Notes: The used margin will be constantly adjusted with the changes in the AUD / USD market price.

In addition, when Client A takes short of 5 mini lots of EURO/ POUND in 0.8520 position on Origin platform, and meanwhile the quotation of direct trade EURO / USD is 1.3048, the margin of the user during the order transaction is:

Margin = 5 Lots * 10,000 (Contract Size) * 1.3048 (Market Price) / 100 (Leverage) = 652.40 (USD)

Notes: The used margin will be constantly adjusted with the changes in the EURO / USD market price.

Finally, the new policy about margin is also applicable to the gold and silver product trading of various investors involved on Origin platform. For example, when Client A takes short of 10 mini lots of gold (1 mini lot of gold contract is 10 ounces) in USD 1440.00 position, the used margin during the order transaction is:

Margin = 10 Lots * 10 (Contract Size) * 1440 (Market Price) / 100 (Leverage) = 1440.00 (USD)
Note: The used margin will be constantly adjusted with the changes in the gold price (XAU / USD).

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Risk Disclaimer:Forex margin trading carries a high level of risk to your capital, may not be appropriate for all investors. Investors shall carefully consider your financial condition and affordability before trading any financial product. Trading could lead to profits as well as loss of your investment capital, you may lose all your initial invested capital. Please ensure you've read all the risk warning before trading.

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