trading in margin base

Margin trading systemThat the system of margin trading is a system that gives you the possibility to trade goods worth more than your capital times.

Is this type of trading to deal with private companies are doubling your capital several times as it allows you to trade a commodity exchange for a discount as a fraction of its value as a token of the user.These companies are not about sharing profit or loss where there is only asking you to pay the full value of the item sold and after the implementation of its mandate is limited to buy and sell orders that you set a price that you choose.

If the item ordered it to sell at a higher price than the purchase price will be implemented and it deducted the value of Item is complete and you will return your deposit plus full profit as if you actually have the item. The item ordered it to sell at a lower price than the purchase price will be implemented and it will be deducted from your account to have the value of the item is completed in full.

Before you do any selling or buying process will open an account with this company and will deposit the amount of money. This amount will continue to be without prejudice to decide to buy a commodity traded by the terms of your account will be divided into two parts:Sidelines of the user will be deducted according to the equation:Used margin = the number of contracts * contract size / ratio multiplier.The available margin is calculated by the equation:Margin = Equity - Margin userAnd have used margin is the maximum amount that can be lost in the transaction.Now we return to our previous example:I've purchased a car from the car agency at $ 10,000 was deducted $ 1000 from your account as margin and the user remains in your account the amount of $ 2000 is available as margin.Now you have a car in your name you can sell in the market .. And keen to make a profit selling them at more than $ 10,000.Now go to the market and looking for a buyer of the car at a higher price of $ 10,000 .. is not it? No .. Not the case ..!!

We will assume that the method of buying and selling cars in your country are in a public auction in which all who wish to participate by buying, selling and where the price of cars on the change according to supply and demand.If the number wishing to buy cars on the number of vendors will increase the price of cars and will continue to rise as long as there are a greater number of buyers.If the number wishing to sell cars for a number of buyers will drop the price of cars and will continue to decline as long as there are a greater number of sellers. Now you have a car would like to sell ..Will go to this market and will monitor the price of the car on the market that determines depending on supply and demand in the market, your car is desirable and there are a lot of people are willing to buy them will increase their price from $ 10,000 to $ 11,000 for example, and if there is more demand for them may increase the price to $ 12,000.Here you learn that all you have told Auto shot is the amount of $ 10,000, a price that the car I bought it, I sold the car at the current market price of $ 12,000 which will be the winner no doubt.So when the price of the car $ 12,000 in the market to order an agency cars to sell the car in your name with this price, we will implement the agency it will sell the car at $ 12,000, will deduct $ 10,000 full value of the car that prompts you to him and will bring you your deposit which opponent margin user will add profit is $ 2,000 to have your account (12,000 $ - $ 10,000) and will become your account now has $ 5,000 ($ 3,000 original account +2000 U.S. dollars profit from the deal).You can withdraw that amount or withdraw part of it, as you can return the ball again.In all cases share a soundly this night ..!!In exchange for that were deducted from the amount of $ 1000 profit on your account got $ 2000, an increase of 200% of the capital .. Note that capital was not more than a token was returned after the completion of the deal ..!!

But what if I went to the market and found that the number of vendors more than the number of buyers? And that there are not many who want to buy your car?Price of the car will drop from $ 10,000 to $ 9500, for example. This means that if you sold the car at the current market, you will lose $ 500.Where if you had ordered the agency cars to sell the car when he became the price of the market $ 9500 will implement it and you'll get $ 9500 and will be deducted from your account with $ 500 for the complete value of the car is complete, and will you deposit you paid a margin user and thus your account to have = $ 2,500 (3000 original account $ - $ 500 loss).Of course you do not like this .. Believe me, no one wonders ..!!So wait in the hope that the demand for your car and return the price to rise. But what if demand has not increased, but increased supply?!! Your car will drop the price more than $ 9500 to 9000 $.Here, ordered the agency to sell your car at the current $ 1000 will be your loss St_khasmha Agency of your account and your account will remain at $ 2000.Will wait for more ..But the price is still in the drop will reach to $ 8000 for example. 

What will happen here?You can probably have to wait for more price goes back up. The agency, however, cars will not wait for a moment ..!! It monitors the price of cars in the market and watched you entirely ..!!They will not allow that the price drops more than that ..Why?Because the amount you have available margin = $ 2,000 which, as I learned the maximum amount you can afford to lose in this deal.When the price of cars in the market to $ 8000 even decided to sell your car at this price the company will be able to complete the rest of the price of the car and the deduction from your existing account to it, they can discount $ 2000 in margin available to you.But if the price of cars less than $ 8000 means that your loss will be more than $ 2000 then if you decided to sell the car will not be able the agency to complete the rest of the value of the car of your account and that where there is no margin available only $ 2000 only .. here will bear the agency is part of the loss. 

This does not allow it .. never!!Everything that you can lose is the amount in the margin you have available. But what will happen when the price of the car in the market to $ 8000? You will come from the agency so-called margin call Margin Call.It is a warning that prompts you when the company either to sell the car immediately or add more money to the margin you have available. What is this?We mean that the agency monitors the price of cars cars all the time and with any change in the price of cars in the market assume that you sell the car Stamrha it. And is always keen to assume the loss is complete and you are not. As it is not about sharing the profit is not about sharing the loss.When the price of the car market in the $ 9000 is not a problem for the Agency cars, because if you ordered it to sell the car at this price you will be able to complete the value of the vehicle deduct $ 1000 of margin you have available.And when the price of the car market in the $ 8500 is also not a problem where the difference can be deducted from the margin available if ordered to sell the car at this price.But when the price of the car market in the $ 8000 if ordered to sell the car the price difference will be deducted from your available margin is the margin available to all who have = $ 2,000If the price falls more - even a penny - will not be able to complete the car value of the discount from your account.If we assume that the price of the car in the market has become = $ 7500 if you sell the car at this price will be your loss = $ 2500Sale price - purchase price: 7500 $ - $ 10,000 = $ --2,500Can deduct all the available margin that you have a $ 2000 and $ 500 will not be able to be covered from your account and will bear the loss.So when it becomes:The current market price - purchase price = margin availableCEATEC margin callWhat you have to do then?You a choice of two:Either to order the Agency to sell the car at this price any sell at $ 8000 and it will implement the Agency's order and deduct the difference from the margin available to you and it deducted $ 2000 and had thus completed the Agency the full value of the car ($ 8,000 current market price +2000 U.S. dollars the amount deducted from your account) and thus You re-deposit margin paid user becomes in your account with $ 1000 ($ 3,000 original account $ --2,000 amount deducted)And be your loss in the deal is the $ 2000 incurred by you in full.If you do not want to sell at this price and you want to wait any longer may re-price rise, you should add more money for the margin you have available.If we assume that you add the $ 1000 will be available on the margin Margin = $ 3000Even if the price dropped to $ 7000 car will be able to complete the Agency the full value of the car in case of a sale at the current rate.But what if the price of the car in the market to $ 8000 and I received a margin call Iba car did not add more money to my account? What will happen?Agency will sell cars that the car in your name at $ 8000 and will not be waiting for you.Will be covered so on their own .. You like it or not ..!! Fajova more of the low price will sell the car at $ 8,000.As we have said it will not allow you to lose more than the amount in the margin you have available.

Called the moment the agency to sell the car out of fear that the loss is borne by the moment of closure forced Auto Close.This behavior just does not doubt ..When the rising prices of cars you will get the full profit for yourself will not only be required to pay the full value of the car .. It is only fair that if the agency does not bear the loss incident for lower prices .. they are not about sharing profit or loss.If you understand the previous example, I understand the principle upon which the margin trading system Trading in Margin Basis.The system of margin trading is an opportunity for many people to enable them to trade more than the size of their capital several times while retaining the full profit as if they actually have the item and thus can store to get huge profits, a rate can not be obtained any other type of investment.Many are the people who have the efficiency to engage in the business world, but their problem is they do not have large enough capital that enables them to work. Trading system marginal Deluxe interested in what is capital!!You can understand the trading system marginal like a loan that the institution that deal with them .. where lend Foundation item that you want to trade in return for payment for a fraction of its value as a token of a redeemer, to reconsider the value of the item after it sold without you share a profit or loss.To ensure that does not take this item and run away without the return of remains of this item of the institution are reserved in your name, where you can sell them to order order company that sells at a price that you see you are appropriate, whether profit or loss should not exceed the value of the loss for the amount in your account at the institution and that you will use the Foundation to cover the loss that I got to recover the full value of the item with no loss in all cases. Will be able to trade in different types of goods and sizes may exceed 200 times your capital ..!!But before moving on to the margin trading system in the world market .. We will return to some of the concepts so make sure you understand the basis upon which this type of trading.

Used margin and the usable margin

The second lesson

Used margin and the margin available

When you open an account with a company that allows trading on a margin which will be deposited in advance a fixed amount will remain without prejudice to the amount you decide to buy a car, that is, to decide to enter into a deal, then your account will be divided into two parts:

Used margin: a deposit which will be deducted in advance, a refundable deposit will be returned to your account after the sale of the car, whether sold at a profit or a loss.

Margin: an amount that is left in your account after the deduction of margin used, and this amount is the maximum amount that allows you to defeat in the transaction.

How to calculate the margin used?

Do not want to pay much attention to how to calculate the margin in your own user often will not need so you will determine where the company is already the amount will be deducted from your account as a token for every unit of the commodity. In the previous example will tell you that it auto agency deducted $ 1000 from your user margin for every car you purchase. If I bought two cars will be deducted from your $ 2000 margin user will remain in your account $ 1000 margin is available.

In spite of that the company will deal with it Stgnek about the need for a margin account used only for yourself that it would be very useful to learn how to do this yourself.

Can calculate the margin of the user who will be deducted as a token of any commodity by any company with the following equation:

Used margin = value of the item purchased with a full / double ratio

In the previous example: full value of the car = $ 10,000 and the percentage multiplier that allows the company is 10 times, ie, that the company doubled your capital 10 times, so that the margin St_khasmh Agency:

Used margin = value of the item full / double ratio

                  = 10,000 / 10 = $ 1,000

If I thought of buying a car two cars instead of the user that the margin will be deducted from your account:

Used margin = 20.000 / 10 = $ 2,000

Dealing in global markets that allow brokerage firms to trade on a margin of different kinds of goods for each company a certain quality of goods, are sold on the basis of each type of unit called a fixed size of the contract, the lowest unit is the trading of the commodity.

In the previous example about cars the size of the contract = one car worth $ 10,000, meaning you can not be traded for less than a car worth $ 10,000 and you can be traded in multiples of this number are trading as if the car or three, etc. ..

Of course you are not allowed to trade a car and a half!!

And the method of calculation used margin:

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

The contract size will know who is dealing with the company and the percentage of doubling in advance to deal with them, one of the things that may vary from company to company.

In our previous example:

We know that the size of the contract = one car worth $ 10,000 and the percentage multiplier = 10

So we know that if we are trading in a car, the amount which St_khasmh agency cars from our agenda is the following:

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

                  = 1 * 10.000 / 10 = $ 1,000

But if we want to buy two cars will be:

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

                  = 2 * 10.000 / 10 = $ 2,000

Thus you can calculate the margin used for any number of cars If we assume that you want to buy 3 cars will be a one-time deduction of the amount of $ 3000 as margin the user.

Even if we assume that you have dealt with the agency cars have the same value of the cars, but it gives you the percentage of increase equal to 20 times means that the agency will allow you to trade Bassarat worth 20 times the amount paid as a token, you can calculate how much is the margin which will be deducted if you want to trade in a car is the same:

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

                  = 1 * 10.000 / 20 = $ 500

This means that this agency will be deducted from your account $ 500 for each car traded by.

 How to calculate available margin?

Calculated the following simple equation:

Margin = Equity - Margin user

Only previous example:

You deposit $ 3000 in your account is already opened by the agency have a car Frshehadk = $ 3000

When I decided to buy a car, the company deduct $ 1000 as margin user, it will be the margin you have available now:

Margin = Equity - Margin user

               = 3000 - 1000 = $ 2,000

The maximum amount you can lose in the deal.

If we assume that you decided to buy two cars, will be charged $ 2000 margin and the user will be the margin you have available now:

Margin = Equity - Margin user

              = 3000 - 2000 = $ 1000

The maximum amount you can lose in the deal.

Until now it has become know as follows:

That the system of margin trading is a system that gives you the possibility to trade goods worth more than your capital times.

Is this type of trading to deal with private companies are doubling your capital several times as it allows you to trade a commodity exchange for a discount as a fraction of its value as a token of the user.

These companies are not about sharing profit or loss where there is only asking you to pay the full value of the item sold and after the implementation of its mandate is limited to buy and sell orders that you set a price that you choose.

If the item ordered it to sell at a higher price than the purchase price will be implemented and it deducted the value of Item is complete and you will return your deposit plus full profit as if you actually have the item. The item ordered it to sell at a lower price than the purchase price will be implemented and it will be deducted from your account to have the value of the item is completed in full.

General principles for the introduction of margin method

The first lesson
General principles in the system marginal
General idea of ​​the method of work on a margin

What is to work on a margin?

To be able to understand the mechanism of the introduction of margin, we easily we shall explain by example Serafguena felt all the time.

Suppose you want to trade in cars and so that you are buying a car then you are selling in the market for a buyer at a higher price and how you do it?

Will go to an agency of big cars will choose one of the cars that you think you will find the application in the market to assume that the price of the car when agency automobile is $ 10,000.

All you need is to provide this amount and you pay for agency vehicles and thus the owner of a car of $ 10,000 .. Since the purpose of buying the car is traded, you will go to the market and hoping that the car was sold at a higher price than the price I bought it.

Now suppose that when you went to the market and found that the demand for high quality car and there are a lot of people would like to buy .. then will display your car at $ 12,000, for example ..

If I sold this price will be your net profit from trading in this car $ 2000, but what if I went to the market and found that the demand on the quality of your car is weak and he does not have a wish to purchase price of $ 10,000 and the maximum price one can buy a car is $ 8000?

What does that mean?

Simply means that you've sold your loss at this price, the trading in this car would be $ 2000. It's a clear process is much work every day .. and you can do so you also.

But wait ..!!

To the previous process, you have to be their property to the amount of $ 10,000 from the outset to be able to buy a car buy it .. This is your capital in a trade.
If you were not have this amount will not be able to buy the car and therefore would not be able to sell in the market .. This means that in order to be able to trade in car must be their property for the entire value of the car I. ..

Is there a way, because without you this process that you have $ 10,000?

Yes there is a way .. A working method Margin Trading in margin basis

How so?

Why Oukal you the owner of agency cars: "If you would like to buy a car to trade them there is no need to pay me $ 10,000 full value of all that is required of you is to pay my deposit valued at only $ 1000 and I'm going to book the car in your name so that you the opportunity to sell in the market then return to me the rest of their value. " It's a wonderful opportunity and no doubt ..

Note that we said here, "book" The car in your name .. Means that the agency will not give you a car but the car will actually booked in your name and makes them at your disposal for the purpose of trading them so that you can sell at a price that you like and if you actually owned.

But why Atatini to the car?

Because you did not pay only a tenth of their value .. just gave you the car you take it and get used ..!!
So it is Atattiyk detain the car, but your name, but the remainder of their ..

So how can I trade in?

Well .. when you know that you have a car reserved for trading in your name and that you can sell at a price that you want, you can now go to the market and search for a buyer at a higher price than the purchase price of the car.

To transport you found the buyer in the market for a car at $ 12,000 and then order an agency to sell the car buyer car reserved in your name at $ 12,000.
Buyer will pay the $ 12,000 car and pick it up ..

Agency will deduct the value of cars, a $ 10,000 car will respond to you and you paid your deposit is $ 1000 plus full profit is $ 2000. Since you originally no intention of trading, but it will not drive you differentiate that you get on the car or actually remain with the agency cars.
It is important that you had the opportunity to trade a commodity worth ten times the amount you paid and got a full profit and if you actually have the item.

This way ensures agency access to cars full value of the car and you also get the full profit.

In this way everyone is happy ..!!

In the previous example as soon as your payment for the amount of $ 1000 was able to get any profit of $ 2000 200% of your capital paid-up just because you found a company that allows you to pay a fraction of the value of the item you wish to be traded.

It's a great opportunity right? But how did this happen?

This happened because the agency allowed the cars you the opportunity to double leverage your capital is paid $ 1,000 to any ten-fold to $ 10,000 and this has allowed you the opportunity to trade in a commodity worth ten times the actual value of the largest paid-up your capital.

This is called the doubling of capital or leverage Leverage.

When you get the possibility to double your capital ten times meaning that you return for your payment - your investment - the amount of what it is made available to you the opportunity to trade a commodity worth more than ten times the value of your capital.

When you get the possibility to double your capital to one hundred times the sense that you are against the payment of the amount of what it is you will have the opportunity to trade a commodity worth more than one hundred times the value of your capital.

And you will get full profit and if you have the item already.

Ie if we apply it to the previous example it is against the payment of the amount of $ 10,000 you will have the opportunity to trade cars worth $ 100,000 ten cars any one time .. If you win on each car the amount of $ 2000 means that the profit on the transaction is complete (2000 * 10 = $ 20,000) will get them in full and all the profit return on investment to the amount of $ 10,000 as a token of a redeemer will return you in the end ..!!

Is this reasonable?

Yes .. a reasonable This is what happens every day hundreds of millions in financial markets and margin trading system.

Did you know now how to make millions?!

To go back again to our previous example:

At the outset we have the regular way trading was as follows:
You make a purchase through your payment for the entire value of the car.
You go to the market and offer your item for sale.
You sell.
If you sell your car at a higher price than the purchase price to be profitable, but I sold it at a lower price than the purchase price to be a loser.

But when you have to trade in a margin that is what happened:
You buy from a dealership you to double your capital and ten times, however, that you pay a token amount of $ 1000 refundable and you are so temporary owner of the car until it is sold and re-value.

When you pay $ 1000 Agency gave you the possibility of trading cars car worth $ 10,000 that is, they Mkntek of trading ten times your capital. I went to the market and offered your item owned by temporarily for sale. You sell it and ordered that the agency that sells auto car owned by the temporarily - and they already have in your name - to a buyer who found him in the market at a price that you specify.

The agency is implementing car and has to sell the car to the buyer, and then deducted the original value - which Batk by car - the $ 10,000 and the rest as profit net Slmtk you re-deposit you paid at the beginning.

Note here ..
That when the agency cars to double your capital tenfold, they did so to allow you the opportunity to trade the value of a car (items) worth more than 10 times the value of what you paid for that you pay the rest of the value of the car after you sell, or when you paid the amount of $ 1000 and become an owner temporarily for the car you are indebted to the Agency the amount of $ 10,000 cars to pay full value of the car, as the amount of $ 1000 which is only paid a deposit refundable upon payment.

If you order and the agency that sells auto car at $ 12,000, they will be implemented and it will deduct $ 10,000 value of the car and will deposit you paid plus the first $ 2000 in profit is trading.

But what if you sell the car at a lower price than the purchase price?
What if I sold it at $ 8000 USD for example? Then you will be prompted to complete the value of the car of your own pocket, that would be required to pay the amount of $ 2000 in order to complete the value of the car and then recover your deposit paid in advance.
Just as the agency does not car about sharing the profit is not about sharing the loss too.

Whether you win or lose, but they are not asking you to pay the full value of the car after the sale, if ordered to sell the car at a higher price than the purchase price will be implemented and it deducted the value of the car and then you received your deposit plus full profit.

If ordered to sell the car for less than the purchase price, it will be implemented and also to pay Stelzmk of your own pocket completes the full value of the car, and this amount is your loss in this transaction.

In the previous example, when I sold the car at $ 8000 USD it is you need to add the amount of pocket $ 2000 to become the amount of $ 10,000 and for payment of the car and told you have to bear the loss and not an agency vehicles, and in all cases recovered your deposit paid in advance.

But why not deceive Agency cars?!

Well: When we started dealing with agency vehicles that allow us to double the capital ten times what we paid is the amount of $ 1000, and when ordered us agency car to sell the car at $ 12,000 - after that we found her on the buyer at this price - the Agency to sell the car at a price that we set and returned to us deposit plus full profit.

If: If you ordered the agency to sell the car at $ 8000 will not add anything of Jaibna All that the agency car is 1000 $, so we will make agency car is borne by the loss ..

So you will not pay anything ... We'll run away ..!!

So you do not actually happen, dealing with the Agency for cars in a way the margin has a special system that we can geomatics in one sentence:

Must deposit the maximum amount that can be lost in the deal in advance with the agency cars.

How so?

In order to allow you the opportunity to margin trading system which allows you to work most of the ten times the size of the agency cars Ststrt follows: to open an account and have deposited the amount of $ 3000, for example. This amount will be deposited in advance with the agency cars.

Agency cars will return to double your capital ten times leverage and allow you to trade a commodity exchange to pay only a token worth one tenth only refundable.

Will you buy a car, since it does not need to pay only one tenth their value, and since the value of $ 10,000, but it does not need to pay $ 1000 as a token of a redeemer.

When you buy the car will be deducted from your deposit any will deduct $ 1000 Snsmi this "used margin used margin".

Will remain in your account is now $ 2000 is not used Sensmiha "margin available usable margin". This will be the amount is the maximum amount you can lose the deal.

The agency thus ensuring that you are the car will bear the loss of that happened and are not, and will not be afraid to run away because there have in your account the amount you can afford to lose.

When you order the agency to sell the car the car the amount of $ 12,000 will be implemented and the agency it would sell the car and deducted $ 10,000 value of the car and will your deposit plus full profit and will it add to your account with bringing your account has = $ 5000.

But if he ordered the agency cars to sell the car at a lower price than the purchase price for the transfer of $ 8000 will and agency, auto executes the commands and will sell the car and then deducted $ 2000 from your account have to complete the rest of the price of the car, and then will return you to your deposit to your account and will become your account has only $ 1000.

Do you know why this method is called to work "margin trading"?

This is because it is dealing and trading on the margin of profit and loss in trading commodity is no need to pay the full value, in terms of the deal, the profit is added to calculate the margin of shops and deduct the expense of the loss of stores.

What do you understand as well?

Understand that you can not in any deal to lose more than the amount in your account with the company that allows you to trade on a margin.