Forex broker max leverage Forex broker max leverage

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How Leverage Is Used In Forex Trading How Leverage Is Used In Forex Trading How Leverage Is Used In Forex Trading 2 "Leverage" in general terms simply means borrowed funds. Forex broker max leverage. Leverage is widely used not just to acquire physical assets like real estate or automobiles, but also to trade financial assets such as equities and foreign exchange ("forex").Forex trading by retail investors has grown by leaps and bounds in recent years, thanks to the proliferation of online trading platforms and the availability of cheap credit. The use of leverage in trading is often likened to a double-edged sword, since it magnifies gains and losses. This is more so in the case of forex trading, where high degrees of leverage are the norm. The examples in the next section illustrate how leverage magnifies returns for both profitable and unprofitable trades.Examples of Forex LeverageLet's assume that you are an investor based in the U.S. and have an account with an online forex broker. Your broker provides you the maximum leverage permissible in the U.S. on major currency pairs of 50:1, which means that for every dollar you put up, you can trade $50 of a major currency. You put up $5,000 as margin, which is the collateral or equity in your trading account. This implies that you can put on a maximum of $250,000 ($5,000 x 50) in currency trading positions initially. This amount will obviously fluctuate depending on the profits or losses that you generate from trading. (To keep things simple, we ignore commissions, interest and other charges in these examples.). Forex broker max leverage Forex broker max leverage

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