What is foreign exchange risk control?

The foreign exchange market is a very risky market, the risk mainly comes from the variable which decides the foreign exchange price, so what is the foreign exchange risk control? Let's introduce it to you.


Risk management of a securities firm can be considered from the following two perspectives:
From the perspective of traders, the risk control of foreign exchange trading is mainly reflected in: leverage, that is, margin ratio. At the same time, trading is a probability game, and the profit loss ratio is an important concept, that is, the setting of stop profit and stop loss. From the point of view of mentality and discipline, first of all, we should make a trading plan and implement it strictly. For the novice, choose the best liquidity to trade to avoid extreme market liquidity risk.
From the perspective of brokers, foreign exchange risk can be divided into two categories: market risk and operational risk.

Two kinds of risks faced by securities companies
1. Market risk, also known as "exposure risk", is mainly monitored and managed and hedged by professional risk control personnel using the risk management system, such as hedging the risk exposure to upstream liquidity providers; market risk mainly refers to the position risk, for example, the order quantity of a certain order is too large, and the net position of a certain variety is too high, and the risk control personnel of brokers need to judge based on experience Whether the risk is controllable and whether hedging is necessary to reduce the risk.
2. The operation risk hidden in the daily operation process of securities companies. Although this kind of risk is small, the probability of occurrence is not small. The securities companies need to pay attention to the operation risk and do a good job in risk management. Operational risk mainly refers to the risks that brokers face in the daily business process, such as: customer data protection to avoid the disclosure and theft of customer information; verifying the authenticity of customer identity to avoid "blacklist customers"; avoiding malicious traders or agents to open accounts and swipe orders, bringing risks to the platform.

Our risk control bridging system can help brokers reduce market risk, monitor their positions, and give real-time early warning for large orders; our background management and CRM system can help brokers verify the authenticity of customers' identities, encrypt and protect sensitive data, and reduce the operational risk of securities dealers. We are a financial technology company that provides one-stop IT technology services with more convenience and lower cost for global financial companies.

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