One of the main appealing about forex trading is the use of Leverage & Margin. It allows you to use a small amount of capital to open and maintain a much larger position. For example, if you want to open a trade of $100,000 worth of EURUSD, you don’t have to have that $100,000 dollars in your account.
What is Leverage?
Technically, leverage is where a trader has a large sum at their
disposal while using significantly smaller amount of their own
funds. They effectively borrow the rest from their broker.
For example, if you’re trading with 1:1000 leverage, and you
have $1,000 in your avoount, you’ve got $100,000 available
for trading. Although this sounds like an insanely good
opportunity, you must always remember that it’s double-edged
When you trade with a larger amount, as leverage enables you
to do, you can open bigger positions and potentially earn larger
profits. However, with bigger positions you also have a higher
risk whereby your losses could also be large.
What is Leverage?
Margin trading is a method of trading assets using provided by a third party, When compared to regular trading accounts, margin accounts allow traders to access greater sums of capital, allowing them to leverage their positions.
Essentially, margin trading amplifies trading results so that traders are able to realize larger profits on successful trades. This ability to expand trading results makes margin trading especially popular in low-votality markets, particularly the international Forex market.
In traditional markets, the borrowed funds are provided by an investment broker. In cryptocurrency trading, however, funds are often provided by other traders, who earn interst based on market demand for margin funds.
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any
additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain
investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade
the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated
with trading on margin. Please read our Risk Disclosure document.