Individual investors who have been comparing variety of Forex leverage will soon notice that it is not just about leverage that we must study. Forex leverage ratio is certainly scary, but while learning various other terms, the fear of Forex leverage comparison will also diminish.
Comparing Forex leverage is not something not to be scared about. However, is it really scary enough for a Forex beginner individual investor…
What I want even for novice Forex individual investors to study here is the term "scalping". Both scalping and day trading are techniques to buy and sell in Forex many times a day. You can say that they are completely different.
The etymology of the term scalping is a bit harsh, but it seems there is the meaning of peeling off the skin of the head.
When the Indians repeated tribal fighting and won the tribal struggle, there seems to be a custom of thinning the enemy’s scalp as a symbol of winning. Piling up thick profits with the shortest term investment seems to be imitatiing such a custom of Indian. Forex should not be harsh like the Indian custom, but with Forex you will be able to gain a certain profit while repeating "thin" over and over with scalping.
Actually, in the sense of short, day trading has the same meaning. But what is the difference between scalping and day trading? In day trading, the target price range is about 10 to 100 pips, but for scalping it is around 3 to 10 pips. In the case of day trading, we consider several minutes to several hours, but in the case of scalping, it is about several seconds to several minutes. In scalping, since profit obtained by one transaction is small, it is basically done with high leverage of large funds, but in day trading even small amount is okay. In scalping, trading costs (spread) is applied, so currency pairs with low spread is the target. Scalping is a method of having a new position in the place where you think the market is moving and quickly do settlement.
Although one time profit is small, but it is a technique to obtain "thick profit" by piling up "thin". In the case of scalping, since it will be settled a few minutes right after placing an order, high reflexes is required. It may be suitable for those gamer who plays that action game and fighting game. I think that there are many people who felt the severity of time against day trading, that makes it feel like day trading is loose than scalping, but still busy means busy. Basically you do not have the position the next day but finish the transaction within a day.
But, when considering scalping, there is a feeling of being "slow". In the day trade, you will need the ability to analyze the chart, whether where to order and when to settle. In day trading in Forex, isn’t there a feeling you are doing strategy simulation games intended for gamers such as fire emblems?
The feeling of relaxing like just waiting once you place an order is floating, but the thinking like in fundamental analysis is not necessary in day trading. Actually, "Avenomics" also takes several months from being announced until it is reflected.
In the case of day trading, thinking means analyzing the causes of the chart. There may be individual investors who study economic news and use it for Forex, but that’s not the important motivation, please think about taking time to analyze the chart. Swing trade refers to a method of settling a few days or a few months after ordering, but in the case of swing trade, fundamental analysis may be necessary in some cases. Checking economic news as well in many ways may be of great help in Forex.
First of all, individual investors who are doing Forex have various methods such as scalping, day trading, swing trade, etc. It is necessary to seek what is most suitable for you.
As a method of Forex trading, there is a method to purchase a large amount of currency, sold the winning currency after 5 to 10 minutes using leverage, then do the scalping again. Actually, in Forex, it is said that this kind of Forex leverage comparison and scalping method is effective. Scalping only brings a thin profit in one Forex transaction, but repeating the trade over many times can lead to big Forex profit. There is no need to bring that Indian custom. Isn’t there a saying in Japan that piling up dusts can build mountains? Indeed, scalping is only an idea of earning small amount. However, there may be people who gets frustrated and cannot stand stacking dust, but even without explaining further the logic of the word that becomes a mountain by accumulating dust, I suppose you understand it. It may be the most familiar word in our daily life.
In the case of Forex trading, if you purchased US dollar of 1 dollar at 120 yen using 120,000 yen margin and 100 times leverage, you can get $ 100,000 equivalent to 12 million yen in Japanese yen. Since you hold 100,000 dollars, if you can guide the profit of 10 pips equivalent to 0.1 yen by scalping every time, you can produce a return of 10,000 yen each time. Therefore, it is necessary to repeat scalping about 10 times a day, you can make profit a total of 100,000 yen. If profit of 100,000 yen can be generated every day, the annual profit amount in Forex is 36.5 million yen.
The truth is, perhaps I am talking about the ideal, but with this pattern, it will be possible to aim for big return if you make use of leverage and scalping.
Forex beginners individual investors may not be able to have the consciousness of scalping and comparing Forex leverage at the same time, but in the case of scalping, it is a way even for beginners of Forex to actually win. There may be people who are still frowning on scalping,but scalping is a method to repeat currency trading in a short period of time, and it’s only a method to automatically win when the exchange rate is climbing. In the sense that it is enough to repeat short-term trading when the market wave is good can be thought of as an easy way that even Forex unexperienced people can do even with their eyes closed.
However, there are many individual investors doing Forex who can not win at all. The reason may be due to staying at Forex of 1000 currency trading. If you change to 10,000 currency trade of 1000 currency transactions, profit can also be multiplied by 10, you can make a big profit. However, this is not an absolute thing and the loss is also 10 times, so Forex has the problem of high risk high return after all. However, the risk of Forex may not be a matter for each individual ... .... I think there is a way to look a bit more optimistic.
The risk of Forex where the loss also increases as much as the profit increases can be avoided somehow by thoroughly cutting losses. I think it is a fact that high leverage has high risk. How-ever, even though the leverage risk is high, if you devise a way, it might be possible to conversely utilize high risk high leverage. Maybe leave the day trading in units of hours and to change cosciousness to scalping in units of a few minutes. By all means, try trading Forex by 10 times the 10,000 currency unit.
Start 10,000 currency units Forex trading of 10 times in Scalping
In Forex 1000 currency unit trading, the unrealized gain and loss only moved a few cents (a few tens of yen) to a few dollars (a few hundred yen). However, if the trading unit is multiplied by 10, the display of unrealized gains and losses is also 10 times, and in the transaction of 10,000 cur-rencies it is possible to experience sudden rise and fall in units of tens of dollars (several thousand yen) . In Forex trading 1000 currencies, since floating money is small, the up and down movement is also gradual at a time.
This makes us feel like we are doing big deals, and we are working. And you would feel excited like yourbrain is activated. With such feeling, the transaction result on the first day of the scalp-ing is positive 56.85 dollars (5,685 yen). The total for the second day is positive 194.40 dollars (19,440 yen), the total for the third day is positive $ 69.70 (6,970 yen). The currency pair you al-ways check is around EUR / JPY, EUR / USD, USD / JPY, USD / CAD, AUD / USD, EUR / GBP, and by combining major currencies, expand the chart screen further and display a chart of this currency, making it difficult to view, so be careful. After getting used to the phase, carefully go for judgment of entries and loss cuts. If you can earn about 320.95 dollars (32,095 yen) in 3 days, it is a huge success!
If individual investors in Forex are aware of scalping, since you have to give up the currency you bought within a short time, you can reduce the risk of loss. In scalping, although there is consciousness of about 5 to 10 minutes, but at a time interval of 5 minutes to 10 minutes, even if the currency collapses it can be around 0.1 yen at most. Since it can be reduced to the price of 0.1 yen, even if you make it 100 times by Forex leverage comparison, it is hard to assume that the margin will be greatly reduced. Because we can mitigate the risk of loss by such method, since it can be reduced, if you hear talks like this, it seems Forex leverage comparison will gradually lessen. Plus, when you are doing scalping, you can cut off loss with specified limit value, so you can control the amount of Forex loss to the limit. For individual investors motivated to be as safe as possible, scalping should be very user-friendly. So, to all Forex beginners individual investors, please study scalping, you made here so far, so pursue the Forex sense of security.
If you want to fully enjoy the compound interest effect in Forex, although there are various types of Forex, but isn’t it scalping after all? In the case of scalping using 100,000 yen margin and 100 times leverage, let's assume that you earned 10,000 yen in the first transaction.
If you earn 10,000 yen profit, you accumulate on the initial margin of 100,000 yen, the next time you trade Forex, the margin is 110,000 yen. Next time, if you use 100 times the leverage of 110,000 yen margin, you can buy and sell 11 million yen foreign currency. Next time, you can generate a profit of 11,000 yen by the trading amount of 11 million yen, next time you can make the Forex margin up to 121,000 yen. By steadily making profits, you can keep increasing the amount of margin every time. Even if the same leverage ratio, it is possible to increase the amount to be traded, and in fact, it is said that there is no effective method for compound effect in Forex like scalping.
How much scalping experience in about how many times leverage should be done in the combination of Forex leverage comparison with scalping? I feel this is the most crucial problem. I would like individual investors to remember these rules. Actually the margin which can be aimed at the time zone which is often used in about 5 to 10 minutes is around 10 pips.
Speaking of 10pip, since it is about 0.1 yen in Japanese yen, so with small leverage in Forex, you can hardly make a profit.
When buying 1,000 dollars equivalent to 100,000 yen at a rate of 100 dollars per dollar, if we hold 1,000 dollars and make a profit of 0.1 yen per dollar, the total is around 100 yen. Although I am doing Forex with the original capital of 100,000 yen, it’s impossible to be satisfied with 100 yen at all.
In comparing Forex leverage it seems necessary to use leverage which is the real charm. If you look at Japan's Forex, it means 25 times is the limit, but here comparing Forex leverage, let's also look at overseas Forex traders. In overseas Forex, there are many Forex traders that can use leverage of about 100 times or more, 888 times and Forex companies that can use 1,000 times leverage. I would say that the attraction of Forex is leverage, after all
In this case, suppose we use 100 times leverage and we can get 100,000 dollars equivalent to 10 million yen with 100,000 yen margin. Since we have as much as 100,000 dollars, by increasing the unit price per dollar by 0.1 yen, you can raise the profit of 10,000 yen with just one scalping. Of course, what you want to know here is that in Forex, there is a big difference between using leverage and not. After all, in order to generate some profit in Forex, you seem to have to use leverage.
If you are still afraid to use leverage while actually comparing Forex leverage, 10 times leverage is also fine, and if it is 100 times leverage, the 10 times of that merit. However, individual investors who need to raise the risk by 10, I’m not saying that you should always deliberately use 100 times leverage.
As I said a number of times, since scalping is a method of selling holding currency in a very short term, when the market price is bad, you can take the method of not holding a position. If you can find a situation where the market is moving upward and it is easy to win, you can win using Forex Leverage 100 times, when market is bad, trade break.
After all, in order to make effective use of scalping, 5 times is unsatisfactory even if you compare and use Forex leverage.
Even in comparing Forex companies, the 25 times, but in overseas, there is nearly 1000 times leverage, yet you still can feel a bit unsatisfied.To the extent possible, in order to effectively perform the scalping, it is necessary to use 100 times class leverage.If you do not intend to make money in Forex, you can stay at Forex in Japan and even about 5 times. In fact, Japanese Forex has been limited to 25 times due to the regulation of the FSA, but how do the FSA figures the relationship between this scalping and leverage? In Forex, the method that can make good use of the relation between scalping and leverage, a certain level of high leverage is still necessary.
If you try to challenge Forex 100 times or so, compare Forex leverage, individual investors will inevitably focus on overseas Forex. Since overseas Forex has nearly 1,000 times, I hope you would be able to effectively utilize this Forex company high leverage in scalping. In fact comparing Forex leverage is not so difficult even for beginners of Forex.