What is Leverage?

General topics about Forex trading

What is Leverage?

Postby ereanoraella » Fri May 02, 2014 1:48 am

What is Leverage in Forex industry? Explain in details. I thanks a lot instant reply.
https://www.greenvaultfx.com/liveaccount/liveaccount.php
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Re: What is Leverage?

Postby kipper » Fri May 02, 2014 3:45 am

ereanoraella wrote:What is Leverage in Forex industry? Explain in details. I thanks a lot instant reply.

ereanoraella wrote:Hey, Help me.
What are the difference MT4 and MT5 platforms. Suggest me which one is best to trade?

You are advertising & linking to a specific broker in your posts on here, so why aren't you directing these queries to them?

The answers to the questions you're asking can be discovered in less than a few seconds by tapping the queries into your search browser.
That will open up a whole world of information for you to explore at your leisure.

If you have any ambitions about getting involved in this highly competitive & cut throat business you're going to need to use a lot of initiative & develop the ability to conduct your own research.
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Re: What is Leverage?

Postby forex_edo » Tue May 06, 2014 10:23 am

Leverage is percentage/dividend between your lot and the profit.Leverage can make your account live more long..
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Re: What is Leverage?

Postby vuanh » Mon May 12, 2014 1:52 am

it help us can trade with higher volume. we can make higher profit or loss with it. in this market it is very important.
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Re: What is Leverage?

Postby forex_edo » Thu Jun 19, 2014 10:18 am

davidson333 wrote:Leverage is a financial tool that allows an individual to increase their market exposure to a point that exceeds actual investment. For example, a trader goes long 10,000 units of the USD/JPY with 1,000 USD worth of equity in their account. The USD/JPY trade is equivalent to 10,000 USD. Because the trade is 10x larger than the trader's equity, the trader's account is now leverages 10x or 10:1. Traders use leverage as a way to magnify their returns, but it is imperative to stress that losses are also magnified when leverage is used.

Good explanation sir..
:shock:
For newbie, just use huge leverage, it will safe you from MC...
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Re: What is Leverage?

Postby eko_ddie » Tue Aug 12, 2014 10:04 am

Right know, many broker giving huge leverage. Forexample, in liteforex broker, they have huge leverage 1:1000
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Re: What is Leverage?

Postby rajesh » Wed Oct 08, 2014 5:10 am

The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments by using various instruments that include options, futures and margin accounts. Companies can use leverage to finance their assets. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value. (For more insight, see What do people mean when they say that debt is a relatively cheaper form of finance than equity?)


In forex, investors use leverage to profit from the fluctuations in exchange rates between two different countries. The leverage that is achievable in the forex market is one of the highest that investors can obtain. Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. When an investor decides to invest in the forex market, he or she must first open up a margin account with a broker. Usually, the amount of leverage provided is either 50:1, 100:1 or 200:1, depending on the broker and the size of the position the investor is trading. Standard trading is done on 100,000 units 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 on equities 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% during intraday trading. If currencies fluctuated as much as equities, brokers would not be able to provide as much leverage.

Although the ability to earn significant profits by using leverage is substantial, leverage can also work against investors. For example, if the currency underlying one of your trades moves in the opposite direction of what you believed would happen, leverage will greatly amplify the potential losses. To avoid such a catastrophe, forex traders usually implement a strict trading style that includes the use of stop and limit orders.
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Re: What is Leverage?

Postby eko_ddie » Mon Oct 13, 2014 1:17 am

Why do broker facilitate the clients with huge leverage???
we know that huge leverage only make small profit for the broker.
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Re: What is Leverage?

Postby Moreno » Sat Dec 13, 2014 2:58 am

Leverage is a very important thing in forex trading with leverage this then we will be able to trade using a small capital as $ 5 and we also have to be careful when trading with leverage. because leverage will affect our trading. for now I am comfortable trading with leverage 1: 500 of freshforex
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Re: What is Leverage?

Postby Moreno » Wed Dec 17, 2014 11:16 am

leverage is the leverage provided by the broker to the trader. with their leverage, then we will be able to trade using a small capital. but we must be careful when you want to trade with leverage large as prone to experience trading with full lot
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