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Margin and leverage

Discussion in 'Forex Discussion' started by kaito kid, Nov 27, 2014.

  1. kaito kid

    kaito kid Member

    “leverage” is having the ability to control a large amount of money using none or very little of your own money and borrowing the rest.

    For example, to control a $100,000 position, your broker will set aside $50 from your account ( Like In FBS Forex Broker ). Your

    leverage, which is expressed in ratios, is now 2000:1.

    You’re now controlling $100,000 with $50.

    Let’s say the $100,000 investment rises in value to $101,000 or $1,000. If you had to come up with the entire $100,000 capital yourself, your return would be a have 1%

    ($1,000 gain / $100,000 initial investment).

    This is also called 1:1 leverage. Of course, I think 1:1 leverage is a misnomer because if you have to come up with the entire amount you’re trying to control, where

    is the leverage in that?

    Fortunately, you’re not leveraged 1:1, you’re leveraged 2000:1. The broker only had to put aside $50 of your money, so your return is a groovy 400% ($1,000 gain / $50

    initial investment).
  2. uncle gober

    uncle gober Member

    Leverage up to 1:500 : It means you can trade $100,000 (1 lot) worth of currency for only $200. Minimum trade is 0,01 lot, which is $1,000. Leverage leads to an increase in risk but also in potential profit. Now, I am using this leverage on my trade in my broker and i also using Margin calculator to calculating the margin

    [​IMG]
  3. Leverage and margin are two most valuable part of Forex trading. When selecting the broker we the trader should consider the leverage since the high leverage always help the traders to make high profit. But the high leverage contains high risk and that’s why with FXdirects trading broker I am using their flexible leverage that is 1:100, which help me to make enough profit for my trading. I feel very safe.
  4. Kyle Wilkins

    Kyle Wilkins Member

    Utilizing margin in Forex trading is another idea for some traders, and one that is regularly misconstrued. Margin is a decent confidence deposit that a trader sets up for insurance to hold open a position. As a general rule margin gets befuddled as an expense to a trader. It is really not a transaction cost, but rather a part of your account value put aside and distributed as a margin deposit. When trading with margin recall that the measure of margin expected to hold open a position will eventually be dictated by trade estimate. As trade estimate builds your margin necessity will increment too. I'm trading with XeroMarkets, a regulated broker. It provides ultra low spreads starting from 0.0 pip. It also has advanced trading platform that executes trade instantly.
  5. Jimy Anderson

    Jimy Anderson Member

    In Fx trading leverage is an important financial tool which an investor should consider when choosing a broker. Basically leverage 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 due to leverage up to 1:500 that 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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