Forex Strategies Leverage; the golden tool

[Phabbyfundz]

Through the use of leverage you can invest a small amount of money while trading larger Positions through a loan from your broker. When the trade closes, your broker deposits that money into his account. All the processes are made automatically through the trading platform.
Leverage is presented in a form of multiplier that shows how much larger the open position is against the margin the actually investment amount when it is opened.
The typical option of leverage in forex include 50:1, 100:1 and 200:1. In the US the maximum allowed leverage us the 50:1, anything above 200:1 is considered very high risk. Here is an example to illustrate how leverage works. In other to open a $10,000 position you can use s margin investment of $200, with a leverage of 1:50 ($200 * 50 = $10,000).

 

[Sotherefore]

If you're just new into trading it is always advisable for you to use smaller leverage because this can minimise the risk of your account from being liquidated, if you're trading with more than $100 it is advisable not to even use leverage at all because if you're not familiar with trading you might even lose all your money in a single day with leverage when you are trading.

 

[btaliat]

It seems there are more to learn as a trader. I don't know this leverage of a thing. But I know it is mostly used in forex and I don't even think there can be trade on forex without the leverage setting. However, just like poster above me concluded, there must be knowledge on it before using it.

 

[Setho]

The thing about leverage is that it allows you to buy larger amount of contracts that you ordinarily would not have been able to buy . in as much as this looks pleasing to the ear it also means that you can make a lot of money while they are also equal chances that you can lose that same.

 

[btaliat]

I asked to explain leverage for me. He told me it is used in future trading in future. Though he didn't really explain what it means. He only told me that the higher the leverage, the higher the risk and the profit that will be gotten from such a trade.

 

[Wisdom01]

Leverage is just an important tool for you to increase your trading margin on forex ,it's truly a golden tool , because with little amount of money you could earn more money from the market with ease ,since you have leverage already that you are making use of when trading