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Leverage Forex, what is better to choose?

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Leverage Forex, what is better to choose?



So, what is meant by the definition of “leverage Forex”? It is the ratio of the volume with which the trader works to the total amount of funds held in the account.

This ratio is designated as 1:100 (pronounced - one in one hundred). That is, having the Deposit, say, $ 100, you can trade in the amount of $ 10,000.

 Values leverage Forex can be different. A good Forex broker provides leverage Forex from 1:20 to 1:500. The last option is very risky, although good traders salpingotomy and/or other aggressive trade. Optimal consider the ratio of 1:100, with the option risks:yield as balanced as possible.

Special attention to the choice leverage Forex should be given to new traders. Because the maximum degree of risk in each transaction is considered to be 1-3% of the Deposit. The higher this will leverage Forex, the higher the risk of loss of Deposit. Accordingly, reducing the leverage of Forex (and, hence, the volume of trading positions), the probable loss also decreases.

If you have just started to work on the currency market, start with a ratio of 1:100 and then see results. By the way, many brokers allow you to change the leverage Forex already open account. In the extreme case, you can create 2 accounts at the same broker.

Only testing your trading system on a demo account or a small Deposit, and ensuring its profitability over a long period of time, it is necessary to enlarge leverage Forex. By the way, the intermediate option of increasing profitability and growing Deposit is the increasing trade volumes, and the increase in leverage Forex - final version to increase the profitability of your trade.

After reading this article, you understand what actually leverage Forex determines the maximum value of the loan, with which you will work. The higher the leverage, the greater the loan. Please note that often when increasing leverage Forex broker may also raise margin requirements (for example, to increase the Margin call level from 20 to 30%)

Thus, the concept of “leverage Forex and the volume of trading positions” are interrelated and help reduce and increase the risks and profitability. Use them correctly, and you will improve your trading, not to mention your psychological comfort.
Remember that the profitability of trade is highly dependent on your chosen broker!

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