leverage how it works?

Amelia60

New Member
hello there,It appear that it's very dangerous to abuse leverage, but how to really master it? how to understand it and how to calculate it? if someone can help thanks
 

scottscomps

New Member
Amelia60 said:
hello there,It appear that it's very dangerous to abuse leverage, but how to really master it? how to understand it and how to calculate it? if someone can help thanks
Shouldn't your broker have their own limitations/calculations/offerings of leverage? Better to check their support / help pages
 

Jonathan

New Member
Leverage is the use of borrowed funds to increase a trader's trading position beyond what would be available from their cash balance alone. Brokerage accounts allow the use of leverage through margin trading, where the broker provides the borrowed funds. The traders sometimes use leverage to profit from relatively small price changes in currency pairs. The more leverage a broker give, the more the broker is being chosen.
 

Manuel Ferrera

New Member
Leverage is basically an extra facility given by the broker to a trader. The more the broker give leverage, the more it gets popular. Leverage is an important tool in forex market. While any trader choose a broker, he should know about the leverage of that broker. Because leverage helps a trader to make big profit with small investment. My fx broker is giving me high leverage at 1:500. It helps me to maximize my profit. I can make profit consistently with their high leverage.
 

tamparandewa

New Member
Its easy, always remember that most pair in forex standard lot is 100.000 usd, so if your leverage is 1:1, to open 1 lot position you need 100.000, but if your leverage is 1:1000, you only need 100.000:1000 = 100 usd to open 1 standard lot.
 

PaulST2B

New Member
Hi Everyone,

For me, here in the UK, since the low leverage has come in to 'babysit' gamblers, it is now very hard to trade as the required margin is huge and if at any point your account balance or equity would drop below 50% through a live trade, they auto-close the position which is ludicrous if you still within your stop but they can and do do this now and it is crazy and so I have now felt compelled to trade from Cyprus but luckilly the firm I am using have been ok and my first withdrawl went without any complications but I still wouldn't feel comfortabl having a large balance sitting on their books.

Obviously leverage can be abused but that is either a decision to try and make a go of it with tiny funds with an acceptance that busting is high probability or it's gambling the latter not being something I like but I think there are many ways to use leverage to achieve results not possible under the European trading regs now.

Obviously running EAs with multiple trades would require a LOT of margin in the UK now so hoping to get somewhere with my offshore account!

PS
 

AhsanMalik

New Member
High leverage can bring profit instantly if you are able to make proper trading planning with great risk management policy , otherwise you can fall a huge loss by taking high leverage , in this market place by and large traders in particularly the newcomers fall a great loss by taking high leverage due to non-sense planning and zero risk management approach.  So, before trading with high leverage we have to know how to manage risk.
 

Doherty James

New Member
In my view, it’s not just leverage that’s important but overall features of the company that makes a lot of difference.
 

Jibonuo

New Member
I see you already have your answer! By the way, don’t try to use high trading leverage in your trading! you should use this trading feature according to your trading system’s requirements! In my live trading, currently I’m using 1:50 trading leverage but initially my setup was around 1:100!
 
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