Explain some of the concepts in the previous lessons

3:30 PM |

We have had so far a lot of very important concepts to understand the mechanism of trading, although it clear concepts does not have a lot of complexity, it is important to re-emphasize it as it is the cornerstone in understanding the principles of trading in global markets.
Of the concepts that we have mentioned:
Per unit of goods Unit
They are less extent can be traded by item. Called "Lute" Lot
Dealing institutions that operate the system with marginal things can be traded and fixed units each unit called Lute lot.
In our example was the item is the car and per unit of which is a single car, a less extent you can be traded.
You can not be traded for half a car .. But you can trade in multiples of this unit you can trade car or three, etc.
In our previous example Lot = one car.
There are institutions that allow you to trade textured soy Soy beans and have a minimum trading is 5000 bushels Bushel - a unit of weight - that is, croaker here = 5000 bushel
 . And there are institutions that allow you to trade in gold and have a minimum of trading is 560 ounces any croaker here = 560 ounces.
You can trade Plaut, two or three and Bamadaafath, and you can not be traded half Lott or Plaut and a half.
Contract Size Contract Size
Is the actual value of the commodity company that allows you to trade him.
In our example was the item is a car and the actual value = $ 10,000
When requests to buy 1 lot of Agency meaning that you ask to buy a car and one worth $ 10,000 and when you ask to buy 2 Lott meaning that you ask to buy two cars worth $ 20,000 (2 * 10.000), and so on ..
The size of the contract varies from one institution to another, one of the basic information that Starafha before dealing with the institution that will open the way for margin trading system.

Leverage multiplier
 It is the ratio between the value of the item that you want to be traded between the value of the bond that asks you to pay (used margin) to allow you to trade this item.
The multiplier can be calculated by the following equation:
Multiplier = number of contracts * contract size per / user margin
If we assume that the agency allows you to trade cars car and one (1 lot) worth $ 10,000 versus be deducted from your account the amount of $ 1,000 for each user Lott margin .. You can leverage ratio is calculated:
Multiplier = number of contracts * contract size per / user margin
          = 1 * 10,000 $ / 1000 $ = 10
Which can be expressed as 1:10 for every $ 1 you pay margin user will be multiplied ten-fold, ie, for every $ 1,000 paid by a margin user can be traded commodity worth $ 10,000
Q: I assume that there are car agency allows you to trade in 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 = number of contracts * contract size / margin User
                     = 4 * 10,000 $ / 1000 $ = 40
And it can be expressed as 40:1 means that for every $ 1,000 is deducted margin user you can trade a commodity worth $ 40,000, equivalent to 4 cars at once.
The leverage ratio, which may give you vary from one institution to another, one of the basic information that Starafha before handling the marginal system.
 Used Margin Used Margin
An amount that is deducted from your account temporary token Recovered from the item that you choose to be traded, this amount represents a small percentage of the value of the item you temporary institution Bhdzh to until the completion of the transaction .. The obligation to return to your account after completion of the transaction, regardless of the result of the deal, both ended with a profit or loss.
Used margin is calculated according to the following equation:
Used margin = number of contracts * the value of the contract / multiplier ratio
You just need to know the value of the contract with the company you are dealing with and leverage ratio that gives them to be able to easily find out the amount St_khasmh company temporarily from your margin account user.
In our example the size of the contract = $ 10,000 multiplier ratio is 10 times, you can know how much will be deducted from your agency that you choose to buy 1 lot of any one car:
Used margin = number of contracts * the value of the contract / multiplier ratio
                  = 1 * $ 10,000 / 10 = $ 1,000 will be deducted for each lot
Even thought about buying 3 or 3 cars Lott used margin, which will be deducted from your account:
Used Margin = 3 * $ 10,000 / 1000 = $ 3000, $ 3,000 will be deducted from your margin account user when you buy 3 cars (3 lots).
Question 1: If we assume that the size of the contract with the organization = $ 20,000 and the percentage multiplier granted = 20 times any 20:1 How will the margin of the user who St_khasmh this institution if you buy 2 lots?
Answer: Used margin = number of contracts * contract size / multiplier ratio
                            = 2 * $ 20,000 / 20 = $ 2,000 will be deducted margin user.
Question 2: the same hypothesis, how it will be used margin if I thought buying 4 Lott of this institution?
Answer: Used Margin = 4 * 20,000 / 20 = $ 4,000 will be deducted margin user.
 Margin Usable Margin
Which is the amount left in your account after the deduction of the user margin of it, which is the maximum amount that allows you to defeat the deal.
The main purpose of the available margin is to be the opponent of it in the event of a loss, if lost in your trading drive the amount of $ 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 through which the deal margin can not allow you to lose in the deal more than the value of the margin available in your account.
When you choose commodity trading margin will be truncated user of your account I. .. This amount will come out of the transaction account and if it does not exist already, but in all cases will return to your account after you have finished selling item.
After that margin is truncated user will be left in your margin account, and this is what expressed by the following equation:
Margin = Equity - Margin user
As you monitor commodity price that you have in the market, the company you are dealing with will monitor price as well, and as long as the price of the commodity current greater than the price of your purchase it so that if you decide to sell immediately will 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 purchase price so that if you decide to sell at that price would be a loser will not interfere with the institution as long as it is you have in margin offset this loss.
But as soon as the difference between the current price of the commodity and the purchase price equal to the margin available, will tell you that the end of the deal or add more money to your account with the institution until the opponent than in the case of continued price decline.
And if you do not behave yourself you do not exit the deal did not add more money to your account, the institution itself will sell item at the current price without waiting for you to be, for fear that the price drops larger without being in your compensate for the loss.
So available Valhamc is who gives you the possibility to bear the loss and wait until conditions improve.
From here, you learn as much as your available margin greater extent that it is best for you.
Take for example: Suppose that the agency allow cars to trade in a car, at least one value for each car $ 10,000 and the percentage of 10-fold multiplier
Suppose you opened an account with this institution in the amount of $ 3,000, we'll see what happens if I thought one car trading and what will happen if I thought trading car:
One car Trading:
If I thought that the car dealers, one (1 lot), so you bought a car and one of the institution on a margin, the margin of the user will be:
Used margin = number of contracts * contract size / multiplier ratio
                  = 1 * $ 10,000 / 10 = $ 1,000 will be deducted $ 1,000 from your account temporarily
Margin balance in your account = - Used Margin
                           = $ 3000 - $ 1000 = $ 2000 will continue this amount in your margin account is available, you know that this amount is the maximum amount that can allow you lost.
If we assume that you went to the market and found that the price of the car became = 12.000 $
This means that if you sell the car at this price you will be able to pay the full value of the car and remain of value sold $ 2,000 will be added to your account as part of the gain you (12.000-10.000)
May have to wait in the hope further increase ..
But suppose that the price of cars fell to $ 9,000 for the car, meaning that if you had decided to sell the car at this price will lose $ 1,000 will be deducted from your account at the institution.
Suppose you waited

Here institution will not allow you to wait any longer, 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 be deducted from you if the price fell more.
So you see that the margin that you have given you the ability to be patient until it has reached the price to $ 8,000 per car, where you at this moment able to compensate for the difference the loss of your account.
 In the case of trading car:
Suppose you from the start I decided to trade in the car together, what will happen?
Margin of the user who will be his opponent is:
Used margin = number of contracts * contract size / multiplier ratio
                 = 2 * 10,000 / 10 = 2000 $ will be deducted from your institution margin user.
Margin = Equity - Margin user
              = 3000 - 2000 = $ 1000 is 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 ie you if you sell cars at this price you will pay worth the complete and 20,000 $ (2 * 10,000) and will remain in your account the amount of $ 4000 Sathsal them gain you ($ 24,000 eighth cars at market price Current - $ 20,000 price the cars claimed Foundation).
There is no doubt that the biggest profit in car trading profit in trading one car.
Suppose you waited in the hope further increase.
But the price dropped and became 9500 $ per car.
Here if you decide to sell cars at the current price you will get $ 19,000 and will be lost is $ 1000 will be deducted from your account but you will not be able to compensate for the loss in the case of price fell more than that because the amount in the margin you have is $ 1000 which is the maximum amount you can lose in The deal, so institution will ask you to sell cars at the current price or add more money to your account to be able to wait any longer Perhaps the price comes back up. If they do not the institution itself will sell the cars and difference deducted from your account, for fear that price drops more, no institution can make up the difference from your account.
Note that in the previous example, because your available margin was the largest managed ability to be patient until it has reached the price to $ 8000 but when it became available margin less and you can not do without for more than the price of $ 9500.
All would be interested to learn that regardless of the amount of contracts traded by Apart from the current price of a commodity, the margin available in your account is the maximum amount that allows you to lose in the deal.
So always achieved the following equation:
(Number of contracts * Price) - (number of contracts * price)> = margin (greater than or equal to)
And if you find some difficulty in understanding the previous equation, it is sufficient to remember:
You can not lose more than your available margin regardless of the number of contracts traded by.
Remember that margin trading system is the only way available in front of you to get the profits will not be able to get it only if you are multi-millionaires is the fastest way to achieve a wealth of capital in very negligible and in record time.
And remember that this road is a realistic way, legal and legitimate carried out by millions around the world, for as long as I heard them, and after reading this book you will be able to be one of them that was given this area what it's worth the effort and practice and learn.
It deserves no doubt, is the domain that are manufactured millions ..
An area that generates the wealthy.
As I should not be afraid of the previous concepts and think you are on the verge of a difficult test in math!!
Notions former is very clear and if you find some difficulty in understanding it is because it is new to you, we want to assure you that a little practice you will not need to calculate anything but you will be able easily and instantly know used margin and margin everything related Besafqatk without having 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 user or margin or profit and loss, will be calculated every so automatically you will be able to see the margin available that you have in every moment and will be able to know how much profit and lost at every moment .
The previous mentioned concepts and associated equations are only for reference to you when you need and you can understand things correctly, it is sufficient to understand the previous concepts in general and when you proceed to read will increase your understanding and Tdh's in front of you even more.

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