Foreign exchange trading is challenging, and sophisticated investors may profit from it. However, before deciding to enter the foreign exchange market, you should carefully consider your investment objectives, experience and risk tolerance. More importantly, you should do your best and not invest all your money.
Any foreign exchange transaction has significant risks. All currency-related transactions involve risks, including but not limited to potential changes in political and/or economic conditions that may have a significant impact on the price or liquidity of the currency. In addition, foreign exchange trading is leveraged, any market dynamics will affect the funds you deposit, and the degree of impact is directly proportional to the leverage you choose. This may be disadvantage or advantage to you. You may lose all your original margin and you need to pay a margin to maintain your position. If you fail to recover the margin within the stipulated time, your position will be cut off and all losses will be borne by you. Investors can use risk-averse strategies to reduce risk, such as stop-loss orders or limit orders.
There are also risks associated with using online trading execution software, including but not limited to hardware and software failures and communication failures. Please note that in the case of weekly open trading, market or potential liquidity may result in spreads and delays in opening.but not limited to hardware and software failures and communication failures. Please note that in the case of weekly open trading, market or potential liquidity may result in spreads and delays in opening.
The foreign exchange market is the world's largest and most liquid financial market. Macroeconomic is the main factor affecting the foreign exchange market Therefore, the foreign exchange market is very attractive to active traders, and in theory, they should be the easiest to succeed in this market. However, the success of traders is limited by many factors, including:
Most of the traders have unrealistic expectations about potential earnings and lack the necessary trading principles. Short-term trading is not suitable for amateur investor. Short-term trading is not a shortcut for most people to get rich quickly. Although the foreign exchange market has its own characteristics, and investors are not familiar with the foreign exchange market as in the traditional market (ie, stocks, futures, etc.), this does not mean that investors should abandon financial rules and simple logical judgments. Investors cannot expect to achieve high returns without taking any risks, which may result in unstable trading performance and often suffer high losses. Foreign exchange trading is not simple, and many traders with many years of experience will still suffer losses. Investors must understand that it takes time to learn foreign exchange transactions, and there is no shortcut in this process.
The most attractive feature of foreign exchange trading is the use of high leverage. Leveraged is very attractive to investors to turn small money into big money in the short term. However, leverage is a double-edged sword. Assuming that a 10,000 USD contract requires a minimum margin of 100 USD, this does not mean that trades with an account capital of 1,000 USD can easily buy and sell ten such contracts. One contract is 10,000 USD, and ten contrats are 100,000 USD investments, not 1,000 USD margins. Most investors conduct technical and/or fundamentals analysis and place orders according to their own judgment. Unfortunately, they are also prone to overleverage (the size of the position is too large to support its portfolio), with the consequence that they are often forced to liquidate at the wrong time.
Most professional money managers do not use leverage more than three to four times. In foreign exchange trading, you have a better chance of success if you can gradually increase the volume of transactions with moderation and use stop-loss orders to protect your position.
Third Party Platfrom Disclaimer
AUGS serves customer through MetaTrader 4 and MetaTrader 5 electronic trading platform. MetaTrader is a third-party electronic trading platform provided by MetaQuotes. AUGS does not own its intellectual property rights. AUGS or other subsidiary of our group provide such third-party platforms in order to enable traders to choose the relevant function from the platform to match their needs. However, users should understand: (1) AUGS notsupporting third-party platform, and (2) Users should be aware of the additional risks associated with using such platforms.
Since the MetaTrader platform is provided by a third party, AUGS or other subsidiary of our group may not be able to fully control the platform. Trader may face systemic risks, including but not limited to the communication infrastructure that connects AUGS or other subsidiary of our group to electronic trading systems. Due to system failures or other interruptions, trading instructions may not be executed in accordance with your instructions, or they may not be executed at all. As the electronic trading platform is provided by third-party suppliers, AUGS or other subsidiary of our group are not liable for any loss or damage caused by the use, operation or execution of the third-party electronic trading platform, provided that it is not prohibited by law. In addition, AUGS or other subsidiary of our group are not liable for any direct, indirect, punitive, incidental, special or derivative damage caused by errors, inaccuracies, omissions, delays or any other malfunctions of third party electronic trading platforms.