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  • Leverage

    So we've explained the basic steps you need to take to get started in the forex market, now let's take a closer look at leverage and its role in the market.



    The leverage that is achievable in the forex market is one of the highest that individual investors can obtain. Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. Usually, the amount of leverage provided is either 50:1, 100:1 or 200:1, meaning your broker will allow you to trade up to 200 times the amount of actual cash you wish to trade. Leverage amounts vary depending on your broker and the size of the position you are trading. Standard trading is done on 100,000 units (ie. dollars) of currency, so for a trade of this size, the leverage provided is usually 50:1 or 100:1. Leverage of 200:1 is usually used for positions of $50,000 or less.

    To trade $100,000 of currency with a margin of 1%, an investor will only have to deposit $1,000 into his or her margin account. The leverage provided on a trade like this is 100:1. Leverage of this size is significantly larger than the 2:1 leverage commonly provided in the stock market and the 15:1 leverage provided by the futures market. Although 100:1 leverage may seem extremely risky, the risk is significantly less when you consider that currency prices usually change by less than 1% over the course of a day. If currencies fluctuated as much as stocks, brokers would not be willing to provide such large leverage amounts.

    Although the ability to earn significant profits by using leverage is substantial, leverage can also work against you. For example, if the currency behind one of your trades moves in the opposite direction of what you believed would happen, leverage will greatly amplify the losses. To avoid such losses, experienced forex traders usually implement a strict trading style that includes the use of stop and limit orders (both of which we will discuss in depth later in our walkthrough). Now that we've learned about leverage and the role it plays in the forex market, let's take look at some of the other risks associated with forex.

  • #2
    Leverage is something that needs to be used very wisely, as the best way to succeed is to have proper idea on how to utilize these things. I do it all nicely and that’s why I can make great profits. I am using highest available leverage up to 1:500 with OctaFX broker and I find it seriously good. I like it even more to do with their other features like rebates, bonuses, zero balance protection and even daily market updates.

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    • #3
      I have seen according to my trading experience by and large traders in particularly the newcomers suppose high leverage as many risks. But I don’t consider it at all. if there is any risk it is completely with non-sense planning and zero risk management policy , nothing to do with high leverage at all. For avoiding risk I always use 1:100 leverage my trading career in spite of having up to leverage 1:400 that always ensures my ECN platform TempleFX. But in my demo trading I took high leverage to see the performance how it works.

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      • #4
        In Fx trading leverage is an important financial tool from all trading instruments which an investor should consider when choosing a broker. Practically leverage allows an investor to grow his market exposure to a level that exceeds the initial investments. For avoiding risk I always use 1:100 leverage in spite of having up to leverage 1:500 that always ensures my STP trading platform LQDFX. Actually before trading with high leverage we the traders first of all have to know how to manage risk accurately.

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        • #5
          Thank you very much for your basic instructions on leverage feature! Yeah, I needed to start my live trading with a high leverage feature for the reason that, my trading capital was very low! As I made my profitable strategy in my demo, so I spontaneously added 1:1000 trading leverage in my live trading account of trade24 broker! This is way, now I am able to use standard trade volume in my live chart!

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          • #6
            Leverage is really an excellent for discussing. When we have to choose a broker we have to consider leverage. I am trading with the broker called Trade12 having amazing leverage facility like Leverage is provided by Trade12 in order for the traders to elevate their market exposure, enabling them to open positions that exceed their initial investment.
            The maximum leverage that an investor can get by trading with Trade12 is up to 1:400. However, before trading with a leverage, a trader must first consider all the possible risks involved while trading with a high leverage ratio.

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            • #7
              By and large traders in particularly the newcomers fall a great loss by taking high leverage due to non-sense planning and zero risk management policy, nothing to do with high leverage at all. in my trading career , for avoiding risk I always use 1:100 leverage in spite of having up to leverage 1:500 that always ensures my trading broker LQDFX. But in my demo trading I took high leverage to see the performance how it works.

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              • #8
                Leverage is extremely important for trading, so you'd better find a broker with better leverage conditions. I have a bad experience with Exness, that broker increased its margin levels and all the clients lost their money, so be careful.

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                • #9
                  Leverage is the exciting part of Forex trading. It is expressed by the use of borrowed capital and it is on the base of margin. Mainly it depends on your Forex account type. Leverage is an important financial tool from all trading instruments. Traders can exceeds their own capital through leverage. You will be able to get high volume of leverage with the support of your broker. I am getting high leverage providing by MXTrade.

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                  • #10
                    Leverage enables us to trade more volume. Without leverage we retail traders won't have the capacity to trade forex. It expands trade control. Distinctive brokers give diverse measure of leverage. I am trading with FXPM where I get up to 1:500 leverage.

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                    • #11
                      Without having the proper idea of how to utilize the leverage properly is not wise to use this facility during forex trading. If one can use this facility properly then surely they can earn big amount of profit. Because big profit always come from big investment. But big investment is also a reason of big lose. To us leverage facility and to do it properly I am using the trading platform of TopFX24.

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                      • #12
                        Leverage is extremely an astounding for trading. When we need to pick a broker we need to think about leverage. I am trading with the broker called MaximusFx having astonishing leverage office like Leverage is given by MaximusFx keeping in mind the end goal to the traders to hoist their market presentation, empowering them to open positions that surpass their underlying venture. The greatest leverage that a financial specialist can get by trading with MaximusFx is up to 1:1000. Be that as it may, before trading with a leverage, a trader should first consider all the conceivable dangers included while trading with a high leverage proportion.
                        TRADE IN INNOVATIVE MANNER with MaximusFX
                        http://en.maximusfx.com

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                        • #13
                          Actually leverage is an important financial tool which an investor should consider when choosing a broker, actually it allows an investor to grow his market exposure to a level that exceeds the initial investments. My trading career I always like to trade with high leverage for making profit rapidly , that’s why I have chosen LQDFX which is real STP Execution trading platform and for all time make sure flexible trading leverage up to 1:500 which is very supportive to trade in a high lot in spite of small balance. so, my trading life is very much comfortable.

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