American Ranch

Chapter 277 Risks and Benefits

Spot gold is also called international spot gold and London gold. It can be understood that spot gold is the world's largest stock and has a huge trading volume. According to this year's data, the daily trading volume has reached 23 trillion US dollars.

This is a contractual transaction using the principle of capital leverage.According to the trading standard of the international gold margin contract, use the price of one ounce to buy the trading right of 100 ounces of gold, and use the trading right of this [-] ounces of gold to buy up, sell down, and earn the difference in the middle.

The leverage ratio of spot gold is more than 100, which is an extremely high-risk investment...it should be called speculation.

When making a profit, it is magnified by 100 times, and when it is losing money, it is also magnified by 100 times.

The risk of speculation is controllable, as long as you can control your greed and panic... When there is a mistake in investment, there is a saying: If you don’t sell it, you will lose money, if you sell it, you will lose money.This shit, she's totally talking nonsense...

It is a matter of speculation. Anyone wants to use leverage to the limit in order to earn more profits.Greed and panic are the weaknesses of human nature. Unless you are not human, you cannot completely control them, only part of them.

But since your funds are magnified...

100 times leverage is a terrifying thing, and the emotions you want to control are also greatly magnified.

That is to say, use 100 times leverage to invest all the funds in the account. If you make a mistake in your investment and the price of gold fluctuates by 0.8%, your loss will exceed 80%.

A fluctuation of 0.8% is normal in the spot gold market.

Under normal circumstances, the fluctuation will exceed 3% throughout the day.

The pursuit of extreme profits and good control of positions is very difficult to control, because people's hearts are infinitely greedy.

For example, with 5.00 times leverage, if you operate with one-fifth of the position, if you encounter a drop of [-]%, you will be liquidated in one day.Not to mention the [-]% drop in gold, the risk is huge.But if you think that this is the biggest risk of gold, then you are wrong.

The biggest risk of spot gold is intraday real-time trading. That is to say, if you are bearish on gold today, the final closing price of gold will indeed fall. According to normal thinking, you should be profitable today, but in reality it is not as good as you think. Simple.

Spot gold is traded in real time within a day. If there is a relatively large shock in the whole day's trading, if your position is slightly heavy and your funds are insufficient, sorry, your position will be liquidated before the market closes.

Unless you make your position very light, that is, you have enough margin in your account... However, you still have to lose what you should lose.

……

Illness comes like a mountain down, sickness goes like a thread.

By the time Ellie fully recovers, it will be almost June.

Fifteen people including Jimmy and Zhou Feng formed a studio, which is equivalent to a small-scale hedge fund company without registration, and has begun to enter the spot gold market.

Chen Mo also learned a lot from Ellie during this time.If you can predict the general trend of gold, how to control the position from being liquidated and make a profit.But this thing is so fucking heart-pounding.

Chen Mo tried 100 moves...

1 ounce is $1251.3, with 100 times leverage, buy up...

"It's gone up." Chen Mo and Ellie were in the house in the North Bay area, and they were looking at the price of gold...

"Only one point."

Ellie leaned against Chen Mo's arms. Different accounts and spot gold trading platforms have different values ​​represented by one point.

One point here for Chen Mo is $0.1, that is, 1 ounce has risen from $1251.3 to $1251.4.

100 times leverage is 10 US dollars, and there are 100 lots, that is 1000 US dollars.

A swing of a thousand dollars a second.

Ellie didn't finish her sentence, and it rose by another point, and then duang, duang, and duang rose a few points in a row...

Then the price started to go down again, and it fell...

Then it started to move higher again.

With 100 times leverage, people's inner emotions are really magnified a hundred times...Adding 100 hands, it's just like playing slot machines when you were young.

The funds used by Chen Mo were 12.513 US dollars, but the actual leveraged funds were 1251.3 US dollars.In addition, Chen Mo still has 100 million active funds in his account.

If the price of 1 ounce of gold rises by US$0.1, Chen Mo earns US$1000.Because it is buying up...

If the price of 1 ounce of gold falls by US$0.1, Chen Mo loses US$1000.

The loss and profit of $1000 is not a matter of minutes here, but a matter of seconds.

Ellie leaned against Chen Mo's arms, and couldn't help becoming nervous: "I fell again..."

It rose as high as $1251.9.

Now it has fallen to 1250.1 US dollars, Chen Mo's breathing became tense. In the past few minutes, he lost 1.8 US dollars when he closed the position now.

Then it went up again...

"It has risen, it has finally started to rise."

The price of gold rose strongly, with ups and downs in the middle, and the price reached $1255.6.

"Close the position quickly... Close the position." Ellie screamed.

"It should be able to go up again." Chen Mo looked at the 100 million activity funds in the account. With this money, he could buy hundreds or even thousands of lots.

"The position is almost closed, you look at the time."

"Okay, okay, close the position."

After closing positions, the price of gold is still rising...

"Look, it's 1260, 3 dollars."

"Miscalculation...but you have earned it. As long as you earn it, you want to earn more. The consequences of being too greedy are very serious."

Chen Mo closed the position at a price of around US$1257, and made a profit of US$5.6 after deducting handling fees.

The amount of opening a position was 12.513 US dollars. Because of fear of liquidation, Chen Mo added 100 million funds to his account.If there is no additional funds, Chen Mo's position has been on the verge of exploding due to the biggest drop just now...

That netted a total of $5.6 in two hours.

This thing... is much better than raising cattle.

Chen Mo scratched his head, looked at Ellie whose face was flushed because of nervousness, and took a breath.

Ellie still responded jerky to Chen Mo...

"I want a daughter."

Ellie blinked lightly with her long eyelashes: "Yes."

It was past seven o'clock in the evening when I woke up from bed.Chen Mo picked up the tablet computer and looked at it. The spot gold price dropped again, to $124.3 per ounce.

The changes in spot gold are too big.

You can buy up or buy short. How much money you make here is how much someone loses. There is also a handling fee.In fact, this thing is gambling... unless the situation is bullish.

Ellie lay in Chen Mo's arms, stretched out her smooth arms to take the tablet, and frowned: "The general trend of gold prices is still falling. Although this can get super high returns, the risk is too great."

"I'm going to spend 1 million yuan. How about you help me buy gold futures and trade with spot gold?"

"One hundred million." Ellie stuck out her tongue and shook her head vigorously: "It's too much money, I dare not."

"It doesn't matter if you lose all of the [-] million yuan." Chen Mo held Ellie in his arms: "Try it, we can sign a no-liability contract. Even if we lose all of it, it really doesn't matter."

Ellie still shook her head, and shrank out of Chen Mo's arms...

The two are just boyfriend and girlfriend, not married yet.And even if you get married, it involves a fund of [-] million U.S. dollars...

In investment, no one dares to say that he is making a steady profit without losing money.Moreover, Ellie is good at extreme trading.Unlimited magnification of funds, that is, the pursuit of maximum profit, but also bear the maximum risk.

The funds are small and small.If you lose money, it's a big deal to start all over again, but with a fund of [-] million, you can't afford to lose...

(End of this chapter)