Leverage

Discussion in 'General Forex Discussion' started by RH-Calvin, Aug 4, 2020.

  1. RH-Calvin

    RH-Calvin ECZ Member

    Joined:
    Jun 20, 2017
    Posts:
    30
    Likes Received:
    0
    What is leverage in trading?
     
  2. pipexch

    pipexch ECZ Member

    Joined:
    Aug 6, 2015
    Posts:
    1,241
    Likes Received:
    2
    I got this document From FreshForex educational website I hope it helps
    Leverage explained.

    In an ideal Forex Market, you can only open trades with Volume of At least 1.

    [​IMG]


    And to do this, you need at least 100,000 in your account.


    But as you can see, you are able to open trades with volumes greater than 1, with much less account balance, how is this possible? Well the answer is leverage…

    Note

    1 is the Standard Volume.

    A Standard Volume is Equal to 100,000.

    Simple Math

    Assuming you has an account balance of $200, and you choose a leverage of 1000:1 with your broker.

    Simple math….1000:1 leverage*200=200,000

    So with the leverage, although your actual balance is 200, your “leverage Balance” is 200,000. 200,000 is the “leverage balance” you have available to use.


    Now, as I mentioned above.


    To open a Volume of 1, you need 100,000 as your balance, but since you have a leverage amount of 200,000, you can open a volume of 2 (200,000/100,000)

    This means, if you have an account balance of $200 with a leverage of 1000:1, you can still open a volume of 2!
     
  3. PinkSugar

    PinkSugar ECZ Member

    Joined:
    Apr 11, 2016
    Posts:
    574
    Likes Received:
    1
    Leverage involves borrowing a certain amount of the money needed to invest in something. In the case of forex, money is usually borrowed from a broker. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up and control a huge amount of money.
     
  4. Albert Brown

    Albert Brown ECZ Member

    Joined:
    Jul 20, 2020
    Posts:
    70
    Likes Received:
    0
    Forex trading is the most famous and profitable business in the world. Anyone can start trading and earn a lot of money from the forex market if they proper knowledge about forex. A reliable broker, strong knowledge about forex, and proper guidance can easily make you earn a lot of money from the forex market. I trade with Eurotrader. They are one of the best brokers I have ever worked with. They never make disappointment to their client.