/ Leverage. Forex opens wide opportunities

Leverage. Forex opens wide opportunities

Recently, the popularity oftrading in the foreign exchange market. Terms of transactions in the Forex attract not only the availability and the ability to earn without leaving home, but also by profitable offers from brokers. One of them is the leverage. Forex represents the opportunity to earn on currency fluctuations. Not every day the currency market can please traders with powerful fluctuations of quotations. To obtain a substantial profit on those minor unrest in the sea of ​​currencies, it is necessary to carry out transactions on fairly substantial amounts. As a rule, a private investor does not have such opportunities.

Leverage leverage
The attractiveness of working on Forex isit is in this that the trader is given the opportunity to open a weighty trading position using the brokerage deposit. This is exactly the leverage. Forex allows you to provide positions of greater value due to the provision of additional funds from the broker, which can be used purposefully for the performance of trading operations. The increase in the expected profit, respectively, leads to an increase in the amount of possible losses. But that is the talent of the trader, that, skillfully maneuvering in constantly hopping exchange rates, lose less than win.

Starting to trade in the Forex market, creditthe shoulder of the party is negotiated at the time of opening the account. As a rule, this ratio is up to several hundred to one. This means that having only one dollar on the account, the investor gets the opportunity to open a position for several hundred dollars. There are several reasons why a broker offers a trader a leverage. Forex as the market gives a real opportunity to earn, and from the amount of the investor's profit goes the percentage of the broker. The trader also has the opportunity to make several trades. We can say that such leverage is a significant help, providing a successful start to the majority of novice investors.

Forex Leverage
Let's try on an example to understand how it worksleverage. The forex account of the trader is 1000 dollars, the provided leverage is 100: 1. Buying GBP for USD at a price of 1.4349, the investor really gets an opportunity to operate with a sum at 143490 GBP. Changes in quotations, even by several points, will lead to either profit or loss of tens of dollars.

Operating on the market, it should be borne in mind that socalled margin margin with a positive outcome of the transaction significantly increases the profit of the investor, but at the same time, a negative result leads to an increase in losses. With margin trading, a trader who places collateral is given the opportunity to manage the targeted loans that are allocated to this security.

What is leverage
At the same time, he guarantees with his deposit the compensation of possible losses on the currency positions he opens.

Also before the trader is the task constantlyto monitor the remainder of the margin and not to forget about the stop-orders, because it is thanks to them that you can limit losses. Otherwise, you can get into a situation when there will be an automatic closing of all open positions when the capital falls below the established level, which was termed Margin call.