Three common risks in gold trading

Liquidity risk is the risk caused by poor market liquidity, which makes it difficult for futures trading to complete transactions quickly, timely and conveniently. This risk is particularly acute when a client establishes and closes a position. For example, when establishing a position, it is very difficult for a trader to enter the market and establish a position at the ideal timing and price. A hedger cannot build an optimal hedging portfolio. When closing a position, it is difficult to close the position through hedging, especially when the futures price shows a continuous unilateral trend, or is close to delivery, and the market liquidity declines, making it impossible for traders to close their positions in time and suffer heavy losses. In order to avoid liquidity risks, customers must study the main composition of both parties, so as not to enter a unilateral market dominated by unilateral forces. 3. The risk of forced liquidation Since the futures brokerage company must settle the traders’ profits and losses every day based on the settlement results provided by the exchange, if the futures price fluctuates sharply, the margin cannot be replenished within the specified time, and the traders may face the risk of forced liquidation.Yun Shang Hui Xin In addition to the forced liquidation caused by insufficient margin, when the total position of the brokerage company entrusted by the customer exceeds a certain limit, the brokerage company will also be forced to liquidate, thereby affecting the customer’s forced liquidation. Therefore, customers should always pay attention to their financial status when trading The above three points are the three common risk points in the gold futures trading process, which is a relatively obvious difference between the futures market and other investment markets. All investors must strictly control all risk points when trading to avoid unnecessary losses when investing. Novice investors should pay special attention to this link.Yun Shang Hui Xin Limited