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Tindakan Forex

Started by Indonesia, Apr 09, 2020, 09:15 am

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Indonesia

Tindakan Forex.
Selamat datang di Panduanmarketiva.blogspot.com.
Kami adalah Introducing Broker yang ditunjuk oleh AGEA untuk wilayah Indonesia sejak tahun 2007. Kami telah berhasil membantu banyak trader Forex yang ingin daftar di AGEA, Deposit AGEA, Withdraw AGEA dan bantuan lainnya.
AGEA adalah nama baru dari Marketiva, jadi jika anda baca artikel di website ini dan menemukan Marketiva artinya itu sama saja dengan AGEA.
Keuntungan trading Forex di AGEA : 1. Bonus $5 cash, yang bisa langsung digunakan untuk live trading! 2. Bebas Komisi 3. Bebas Bunga (0% Overnight Interest) 4. Real Time Quotes, Charts and News 5. Bisa Hedging/Lock (lindung nilai) 6. Modal Bebas dan Tanpa Initial Deposit 7. Jarak (Spread) Sell/Buy yang rendah 8. Bisa Trailing Stop 9. Jarak Stop atau Limit kurang dari 2 pips 10. Tersedia fasilitas otomatis order maupun untuk manual order 11. Contract Size bebas dan fleksibel 12. Fasilitas Chat dan Diskusi online 13.Mudah digunakan dan tidak rumit 14. Free Trading Signals 15. Layanan Live Support 24 jam (support bahasa indonesia) 16. Legal dan Aman Dan lain-lain.
Sebelum mendaftar, silahkan anda kirim email dulu ke [email protected] untuk mendapatkan kode kupon yang diperlukan untuk proses pendaftaran. Kami akan membimbing anda melaui email yang akan kami balas tersebut.
Tindakan Ekonomi, Motif Ekonomi dan Prinsip Ekonomi dalam Forex Online Trading di Marketiva.
Tindakan ekonomi adalah suatu usaha yang dilakukan manusia untuk mendapatkan atau memenuhi kebutuhan hidupnya.
Motif ekonomi adalah tujuan anda melakukan suatu tindakan ekonomi dengan memperhitungkan untung dan rugi.
Prinsip ekonomi adalah suatu pedoman untuk melakukan tindakan dengan menggunakan usaha sekecil-kecilnya untuk mendapatkan hasil tertentu dan usaha tertentu untuk mendapatkan hasil sebesar-besarnya.
Prinsip ekonomi ini sangat penting sekali. dari kata usaha sekecil-kecilnya, itu berarti anda menggunakan sebagian kecil uang anda untuk mendapatkan profit tertentu. Bukan dengan usaha kecil mendapatkan keuntungan semaksimal mungkin. Jika anda melakukan hal itu, besar kemungkinan anda akan mendapatkan MC (Margin Call). Prinsip ekonomi adalah yang paling penting dalam melakukan transaksi Forex online trading. tanpa berprinsip demikian, anda tidak akan mendapatkan keuntungan yang baik. Jadi dapat disimpulkan bahwa anda memerlukan prinsip ekonomi, motif ekonomi dan melakukan tindakan ekonomi untuk mendapatkan keuntungan yang maksimal di Marketiva . Tidak membabi buta untuk membuka posisi trading anda karena dengan membabi buta, yang akan anda dapatkan hanyalah loss dan diakhiri dengan margin call. Gunakan kesempatan anda untuk tetap belajar dan tetap belajar untuk mendapatkan hasil yang maksimal.


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Apr 09, 2020, 09:16 am #1 Last Edit: Apr 09, 2020, 09:18 am by Indonesia
Forex Leverage Explained For Beginners & Everyone Else! Subscribe to the channel: https://goo.gl/4DpLu6.
In this Forex trading vlog, I discuss a question I frequently on the ideal Forex leverage to use. Vlog #236.
Many people get interested by Forex trading when they hear the word "leverage". Leverage is marketed by some brokers as a way for traders to make money.
I don't see it that way.
I see leverage as a tool that's allowing me to execute my trading plan properly.
So what's the ideal leverage for Forex beginners?
It's going to be a specific answer for every trader. In short, you must understand what leverage allows you to do as a trader and to what extent you need it.
If you take a single trade in a year, chances are you don't even need leverage.
However, as a day trader or swing trader, you'll often be in a situation where you need to enter multiple trades. Increasing the leverage in your account will reduce the margin requirements (what you need in your account to enter a trade).
You can compute the margin requirement for a specific position with the Forex Margin Calculator provided by Oanda: https://www.oanda.com/Forex-trading/a.
Now, ask yourself how many trades you've taken at the same time. Ensure that the leverage setting in your account will allow you to take that number of trades at the same time.
If so, you're good to go! The issue of the ideal leverage for Forex beginners is fixed!
Forex Trader Community (Facebook Group): http://bit.ly/2esoMYj.
// About Me My name is Etienne Crete (from Montreal, Canada). I'm a swing Forex trader and help aspiring Forex traders develop a trading method that works for them so they can produce income allowing them to live with more freedom.
What you must know: I'm all for trading foreign exchange, but I think freedom is much more important than time spent in front of your computer.
I blog at www.desiretotrade.com and host the Desire To Trade Podcast. I was fed up with the "fake" millionaire traders and the "get-rich-quick-trading guys". That's why you can expect more free content from me than what other people charge for!
If you truly want to succeed in Forex trading, I believe you need to keep working on yourself so you can improve your strengths, but also your weaknesses. Do not focus solely on what you're good at.
// Disclaimer This video expresses my personal opinion only. Forex trading is risky. Make sure you are ready to trade. Even this will not guarantee you positive results. I am not responsible for any losses incurred due to your trading or anything else. I do not recommend any specific trade or action.
// You Might Also Like. This Guy Tells You Exactly How To Trade Forex Full-Time And Make A Living! -

https://www.youtube.com/watch?v=P6H6V . I Met Up With A Professional Trader Today (Invaluable Advice)! -

https://www.youtube.com/watch?v=svkcs . How To Create Your Forex Trading Strategy & Make It Profitable. As I Explore West Lake In Hangzhou -

https://www.youtube.com/watch?v=Zb5X7. Complete Trading Strategy With The Engulfing Pattern - Price Action -


https://www.youtube.com/watch?v=WqTrn.
// All Products Used In This Video Sony a5000: http://amzn.to/2sbMO11 Joby GorillaPod: http://amzn.to/2r0xqQo Editing software: Final Cut Pro (Mac)
AFFILIATE LINKS Thank you for trusting me with my truthful and reliable opinion on any future purchase you may make. I always disclose this information when it is the case. As part of the Desire To TRADE family, you allow me to be able to use affiliate/referral links when suggesting items for purchase. As a customer of the products I refer, you help me sustain the time and resources to create content on this channel by generating revenue from your sales. This doesn't affect you in any way in the checkout process (I'm sometimes even able to arrange a discount for you that is special from other customers).


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Leverage and Margin Explained.
Let's discuss leverage and margin and the difference between the two.
What is leverage?
We know we've tackled this before, but this topic is so important, we felt the need to discuss it again.
The textbook definition of "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 $1,000 from your account. Your leverage, which is expressed in ratios, is now 100:1.
You're now controlling $100,000 with $1,000 .
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 puny 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 100:1 .
Now we want you to do a quick exercise. Calculate what your return would be if you lost $1,000.
If you calculated it the same way we did, which is also called the correct way, you would have ended up with a -1% return using 1:1 leverage and a WTF! -100% return using 100:1 leverage.
As you can see, these clich├ęs weren't lying.
What is margin?
So what about the term "margin"? Excellent question.
Let's go back to the earlier example:
In Forex, to control a $100,000 position, your broker will set aside $1,000 from your account. Your leverage, which is expressed in ratios , is now 100:1 . You're now controlling $100,000 with $1,000.
The $1,000 deposit is "margin" you had to give in order to use leverage.
Margin is the amount of money needed as a "good faith deposit" to open a position with your broker.
It is used by your broker to maintain your position. Your broker basically takes your margin deposit and pools them with everyone else's margin deposits, and uses this one "super margin deposit" to be able to place trades within the interbank network.
Margin is usually expressed as a percentage of the full amount of the position . For example, most Forex brokers say they require 2%, 1%, .5% or .25% margin.
Based on the margin required by your broker, you can calculate the maximum leverage you can wield with your trading account.
If your broker requires 2% margin, you have a leverage of 50:1.
Here are the other popular leverage "flavors" most brokers offer:
Margin Requirement Maximum Leverage 5.00% 20:1 3.00% 33:1 2.00% 50:1 1.00% 100:1 0.50% 200:1 0.25% 400:1.
Aside from "margin requirement", you will probably see other "margin" terms in your trading platform.
There is much confusion about what these different "margins" mean so we will try our best to define each term:
Margin requirement: This is an easy one because we just talked about it. It is the amount of money your broker requires from you to open a position. It is expressed in percentages.
Account balance: This is just another phrase for your trading bankroll. It's the total amount of money you have in your trading account.
While this money is still yours, you can't touch it until your broker gives it back to you either when you close your current positions or when you receive a margin call.
Usable margin: This is the money in your account that is available to open new positions.
Margin call: You get this when the amount of money in your account cannot cover your possible loss. It happens when your equity falls below your used margin.
If a margin call occurs, some or all open positions will be closed by the broker at the market price.
Do you feel overwhelmed by all this margin jargon? Check out our lessons on margin in our Margin 101 course that breaks it all done nice and gently for you.


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Best High Leverage Forex Brokers for 2019.
What is Leverage?
Leverage is the key feature for Forex and CFD trading as it allows traders and investors to maximise the profit in relation to the initial deposit. A leverage means you can deposit a certain amount of capital and use a higher amount of the capital. You can say that the formula for leverage is your initial deposit x leverage level = you total account capital.
For example, if you would like to buy Google stocks through an exchange, you need to transact the same amount of the position, meaning the number of the stocks*Google stock price. On the Forex and CFD market, you need to hold a percentage of this amount called margin. That is why leverage can benefit your trading an allow you a higher chance for a substantial profit. A lot of Day Traders use trading with leverage as a Day trading strategy.
High Leverage Forex Brokers.
The Forex market is known for the high leverage levels provided by brokers. Online Forex brokers provide leverage ratios for their clients as part of the service to their users. Leverage levels can range between 1:10 and 1:1000 and Some retail FX brokers limit the maximum leverage to 1:30, 1:50, others offer a higher leverage level for their users. Take note that European brokers that comply with the ESMA regulation can offer up to 1:30 leverage levels and Forex brokers in the United States who comply with the Commodity Futures Trading Commission (CFTC) are limited to a maximum of 1:50 leverage ratio.
Top 5 High Leverage Forex Brokers in the UK.
24option is a well-known Forex broker in the industry providing Forex, stocks, ETF's, Bitcoin and cryptocurrencies, indices, and commodities via the popular trading platform MetaTrader4.
The broker offers traders and investors leverage of up to 1:500 for all account types - Basic, Gold, Platinum, and VIP.
Among the leading online brokers in the industry, 24options offers one of the highest leverage ratio for Forex and CFD traders.
Founded in 2008, Plus500 is one of the largest award-winning Forex brokers in the industry.
The company is listed in the London Stock Exchange (LSE) with a market cap of $829M.
Plus500 comply with various regulators in different regions including the ESMA that limits leverage of 1:30 in some countries. For some retail clients, the broker offers leverage of up to 1:300 with a minimum deposit of $100.
Regulated by CySEC, FSCA, ASIC, Markets.com offers leverage for clients based on their trading experience.
Experience retail clients can trade with a leverage of up to 1:30 while professional traders can trade with a leverage of up to 1:294. The broker offers detailed leverage terms based on traders' experience and different instruments.
IG Group is a British company located in London and one of the largest Forex and CFD provider in the world.


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IG Group is a public company listed in the London Stock Exchange and a member of the prestigious FTSE250.
The broker complies with the ESMA regulation and other regulators around the globe and offers a different leverage ratio for any region or country.
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Top 5 High Leverage Forex Brokers in the US.
Ally Invest is an American company offering a broad range of financial products with extremely low commissions. The broker offers clients in the United States to trade the foreign exchange markets via MetaTrader4.
All Invest offers its clients maximum leverage level of 1:50. Traders can change their leverage level to 1:20 and 1:10.
One of the oldest Forex brokers in the industry Forex.com is a regulated broker that accepts US traders. The broker is regulated by the Futures Commission Merchant (FCM), Retail Foreign Exchange Dealer (RFED) and the Commodity Futures Trading Commission (CFTC).
Forex.com requires a minimum transaction size of $1000 and a maximum leverage level of 1:50. The broker offers other leverage ratios of 1:20 and 1:10.
Oanda is a well known Forex and CFD broker offering a wide range of trading products at a low cost compared to competitors. Oanda is regulated in the United States, Europe, Canada, Asia-Pacific and Australia and is one of the only brokers providing Forex trading to traders and investors in the United States.


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OANDA is regulated by The Commodity Futures Trading Commission (CFTC) which limits leverage available to retail Forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others.
Located in Omaha, Nebraska, TD Ameritrade is a US brokerage providing Forex online trading among many other financial services and products for US residents. TD Ameritrade is listed on NASDAQ under the symbol AMTD and is highly regulated by several regulators in the United States.
TD Ameritrade complies with regulatory requirements and offers clients a maximum of 1:50 leverage ratio on major currency pairs and 1:20 on exotic Forex pairs.
IG Group offers online Forex trading across various regions in the world including the United States. The British broker is regulated by The Commodity Futures Trading Commission (CFTC) and liable to offer Forex services to US residents. The broker complies with regulatory leverage limitations and provides a maximum of 1:25 leverage ratio for Forex traders.
Risks of Leverage in the Forex Market.
Although leverage can be a great benefit for Forex and CFD traders, it also increases the level risk. A high leverage means you can earn a high profit with a relatively low amount of funds, however, it also means you increase your chances to wipe out your account. In a way, the best strategy to use a high leverage is to have a large amount of capital in your account.
For example, if you own $1000 in your account and your broker offers you a 1:100 leverage, now you have $100,000 in your account. Let's say you open a position on the EUR/USD so every pip changes worth $10. If the EUR/USD rises 100 pips, then you would double your investment, otherwise, you lost the entire amount in your account.
Leverage creates a high volatility in the online Forex market. The more you leveraged a position, the more your profit potential and the higher the risk of loss.
Forex Leverage FAQ.
How Leverage can help you with Forex and CFD trading?
Leverage can boost your trading profits if used successfully and with proper management. As we mentioned, leverage means you have higher capital and your transactions involve a higher profit/loss. Therefore, with a relatively low amount of initial deposit, an investment can grow exponentially.
What leverage to choose in Forex trading?
Choosing the correct leverage in your trading is an important factor that can determine your profitability. First, it depends on your trading experience - inexperienced traders should use a low leverage ratio while experienced traders can use higher leverage.
Your trading strategy is also a consideration for deciding your leverage ratio. If your trading strategy is based on small price fluctuations in short timeframes (scalping), then high leverage can benefit your trading. However, if your strategy is built on a swing, long term positions then there is no need for a high ratio of leverage.
Can you trade Forex without leverage?
Yes, you can. Forex trading provided by currencies exchanges, banks or financial institutions can be done without leverage. Obviously, there is another option to buy another currency against your local currency in the form of physical cash. Take note that the Forex is not very volatile without leverage and unless you have a large capital to invest, profit and loss would be minor.


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Bottom Line.
Leverage can be a great deal and a big risk for Forex and CFD trading. A Forex account can be wiped out quickly with a poor trading management or it can grow better than any other investment in the financial markets.
It is extremely important to check with your broker the leverage ratios, margin requirements and the ability to change these ratios during your trading learning curve. Eventually, you must find the leverage and the size of position that suits your trading strategy and the capabilities of absorb profit and loss.
Forex leverage should not cause panic and cause unnecessary losses. If you chose a leverage ratio that affects your trading, you can switch and lower your leverage levels. On the other hand, if you feel confident with your trading or your trading strategy is based on small price fluctuations, then it is to increase your leverage ratio.


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How Leverage Works in the Forex Market.
The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments by using various instruments that include options, futures and margin accounts. Companies can use leverage to finance their assets. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value.
Using Leverage in Forex.
In Forex, investors use leverage to profit from the fluctuations in exchange rates between two different countries. The leverage that is achievable in the Forex market is one of the highest that investors can obtain. Leverage is activated through a loan that is provided to an investor by the broker that is handling the investor's or trader's Forex account.
When a trader dec >
To trade $100,000 of currency, with a margin of 1%, an investor will only have to deposit $1,000 into her or his margin account. The leverage provided on a trade like this is 100:1. Leverage of this size is significantly larger than the 2:1 leverage commonly provided on equities and the 15:1 leverage provided in the futures market. Although 100:1 leverage may seem extremely risky, the risk is significantly less when you consider that currency prices usually change by less than 1% during intraday trading (trading within one day). If currencies fluctuated as much as equities, brokers would not be able to provide as much leverage.
How Leverage Can Backfire.
Although the ability to earn significant profits by using leverage is substantial, leverage can also work against investors. For example, if the currency underlying one of your trades moves in the opposite direction of what you believed would happen, leverage will greatly amplify the potential losses. To avoid a catastrophe, Forex traders usually implement a strict trading style that includes the use of stop orders and limit orders designed to control potential losses.


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Forex Leverage: A Double-Edged Sword.
One of the reasons why so many people are attracted to trading Forex compared to other financial instruments is that with Forex, you can usually get much higher leverage than you would with stocks. While many traders have heard of the word "leverage," few know its definition, how leverage works and how it can directly impact their bottom line.
The concept of using other people's money to enter a transaction can also be applied to the Forex markets. In this article, we'll explore the benefits of using borrowed capital for trading and examine why employing leverage in your Forex trading strategy can be a double-edged sword.
Key Takeaways.
Leverage is the use of borrowed funds to increase one'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. Forex traders often use leverage to profit from relatively small price changes in currency pairs. Leverage, however, can amplify both profits as well as losses.
Defining Leverage.
Leverage involves borrowing a certain amount of the money needed to invest in something. In the case of Forex, money is usually borrowed from a broker. Forex trading does offer high leverage in the sense that for an initial margin requirement, a trader can build up - and control - a huge amount of money.
To calculate margin-based leverage, divide the total transaction value by the amount of margin you are required to put up:
Margin-Based Leverage = Total Value of Transaction / Margin Required.
For example, if you are required to deposit 1% of the total transaction value as margin and you intend to trade one standard lot of USD/CHF, which is equivalent to US$100,000, the margin required would be US$1,000. Thus, your margin-based leverage will be 100:1 (100,000/1,000). For a margin requirement of just 0.25%, the margin-based leverage will be 400:1, using the same formula.
Margin-Based Leverage Expressed as Ratio Margin Required of Total Transaction Value 400:1 0.25% 200:1 0.50% 100:1 1.00% 50:1 2.00%
However, margin-based leverage does not necessarily affect risk and whether a trader is required to put up 1% or 2% of the transaction value as margin may not influence their profits or losses. This is because the investor can always attribute more than the required margin for any position. This indicates that the real leverage, not margin-based leverage, is the stronger indicator of profit and loss.
To calculate the real leverage you are currently using, simply divide the total face value of your open positions by your trading capital:
Real Leverage = Total Value of Transaction / Total Trading Capital.
For example, if you have $10,000 in your account, and you open a $100,000 position (which is equivalent to one standard lot), you will be trading with 10 times leverage on your account (100,000/10,000). If you trade two standard lots, which is worth $200,000 in face value with $10,000 in your account, then your leverage on the account is 20 times (200,000/10,000).


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This also means that the margin-based leverage is equal to the maximum real leverage a trader can use. Since most traders do not use their entire accounts as margin for each of their trades, their real leverage tends to differ from their margin-based leverage.
Generally, a trader should not use all of their available margin. A trader should only use leverage when the advantage is clearly on their side.
Once the amount of risk in terms of the number of pips is known, it is possible to determine the potential loss of capital. As a general rule, this loss should never be more than 3% of trading capital. If a position is leveraged to the point that the potential loss could be, say, 30% of trading capital, then the leverage should be reduced by this measure. Traders will have their own level of experience and risk parameters and may choose to deviate from the general guideline of 3%.
Traders may also calculate the level of margin that they should use. Suppose that you have $10,000 in your trading account and you decide to trade 10 mini USD/JPY lots. Each move of one pip in a mini account is worth approximately $1, but when trading 10 minis, each pip move is worth approximately $10. If you are trading 100 minis, then each pip move is worth about $100.
Thus, a stop-loss of 30 pips could represent a potential loss of $30 for a single mini lot, $300 for 10 mini lots and $3,000 for 100 mini lots. Therefore, with a $10,000 account and a 3% maximum risk per trade, you should leverage only up to 30 mini lots even though you may have the ability to trade more.
Leverage in Forex Trading.
In the foreign exchange markets, leverage is commonly as high as 100:1. This means that for every $1,000 in your account, you can trade up to $100,000 in value. Many traders believe the reason that Forex market makers offer such high leverage is that leverage is a function of risk. They know that if the account is properly managed, the risk will also be very manageable, or else they would not offer the leverage. Also, because the spot cash Forex markets are so large and liquid, the ability to enter and exit a trade at the desired level is much easier than in other less liquid markets.
In trading, we monitor the currency movements in pips, which is the smallest change in currency price and depends on the currency pair. These movements are really just fractions of a cent. For example, when a currency pair like the GBP/USD moves 100 pips from 1.9500 to 1.9600 - that is, just a one-cent move of the exchange rate.
This is why currency transactions must be carried out in sizable amounts, allowing these minute price movements to be translated into larger profits when magnified through the use of leverage. When you deal with an amount such as $100,000, small changes in the price of the currency can result in significant profits or losses.
Risk of Excessive Real Leverage in Forex Trading.
This is where the double-edged sword comes in, as real leverage has the potential to enlarge your profits or losses by the same magnitude. The greater the amount of leverage on the capital you apply, the higher the risk that you will assume. Note that this risk is not necessarily related to margin-based leverage although it can influence if a trader is not careful.
Let's illustrate this point with an example (See the Table below).
Both Trader A and Trader B have a trading capital of US$10,000, and they trade with a broker that requires a 1% margin deposit. After doing some analysis, both of them agree that USD/JPY is hitting a top and should fall in value. Therefore, both of them short the USD/JPY at 120.


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Trader A chooses to apply 50 times real leverage on this trade by shorting US$500,000 worth of USD/JPY (50 x $10,000) based on their $10,000 trading capital. Because USD/JPY stands at 120, one pip of USD/JPY for one standard lot is worth approximately US$8.30, so one pip of USD/JPY for five standard lots is worth approximately US$41.50. If USD/JPY rises to 121, Trader A will lose 100 pips on this trade, which is equivalent to a loss of US$4,150. This single loss will represent a whopping 41.5% of their total trading capital.
Trader B is a more careful trader and decides to apply five times real leverage on this trade by shorting US$50,000 worth of USD/JPY (5 x $10,000) based on their $10,000 trading capital. That $50,000 worth of USD/JPY equals to just one-half of one standard lot. If USD/JPY rises to 121, Trader B will lose 100 pips on this trade, which is equivalent to a loss of $415. This single loss represents 4.15% of their total trading capital.
This Table shows how the trading accounts of these two traders compare after the 100-pip loss:
Trader A Trader B Trading Capital $10,000 $10,000 Real Leverage Used 50 times 5 times Total Value of Transaction $500,000 $50,000 In the Case of a 100-Pip Loss -$4,150 -$415 % Loss of Trading Capital 41.5% 4.15% % of Trading Capital Remaining 58.5% 95.8%
*All figures in U.S. dollars.
The Bottom Line.
There's no need to be afraid of leverage once you have learned how to manage it. The only time leverage should never be used is if you take a hands-off approach to your trades. Otherwise, leverage can be used successfully and profitably with proper management. Like any sharp instrument, leverage must be handled carefully - once you learn to do this, you have no reason to worry.
Smaller amounts of real leverage applied to each trade affords more breathing room by setting a wider but reasonable stop and avoiding a higher loss of capital. A highly leveraged trade can quickly deplete your trading account if it goes against you, as you will rack up greater losses due to the bigger lot sizes. Keep in mind that leverage is totally flexible and customizable to each trader's needs.


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Forex Margin and Leverage.
Margin and leverage are among the most important concepts to understand when trading Forex. These essential tools allow Forex traders to control trading positions that are substantially greater in size than would be the case without the use of these tools. At the most fundamental level, margin is the amount of money in a trader's account that is required as a deposit in order to open and maintain a leveraged trading position.
What is a leveraged trading position?
Leverage simply allows traders to control larger positions with a smaller amount of actual trading funds. In the case of 50:1 leverage (or 2% margin required), for example, $1 in a trading account can control a position worth $50. As a result, leveraged trading can be a "double-edged sword" in that both potential profits as well as potential losses are magnified according to the degree of leverage used.
To illustrate further, let's look at a typical USD/CAD (US dollar against Canadian dollar) trade. To buy or sell a 100,000 of USD/CAD without leverage would require the trader to put up $100,000 in account funds, the full value of the position. But with 50:1 leverage (or 2% margin required), for example, only $2,000 of the trader's funds would be required to open and maintain that $100,000 USD/CAD position.
While a margin amount of only 1/50th of the actual trade size is required from the trader to open this trade, however, any profit or loss on the trade would correspond to the full $100,000 leveraged amount. In the case of USD/CAD at the current market price, this would be a profit or loss of around $10 per one-pip move in price. This illustrates the magnification of profit and loss when trading positions are leveraged with the use of margin.
Finally, it is important to note that in leveraged Forex trading, margin privileges are extended to traders in good faith as a way to facilitate more efficient trading of currencies. As such, it is essential that traders maintain at least the minimum margin requirements for all open positions at all times in order to avoid any unexpected liquidation of trading positions.


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Low Leverage Allows New Forex Traders To Survive.
As a trader, it is crucial that you understand both the benefits AND the pitfalls of trading with leverage.
Using a ratio of 100:1 as an example, means that it is possible to enter into a trade for up to $100 for every $1 in your account.
This gives you the potential to earn profits on the equivalent of a $100,000 trade!
It's like a super scrawny dude who has a super long forearm entering an arm wrestling match.
If he knows what he's doing, it doesn't matter if his opponent is Arnold Schwarzenegger, due to the leverage that his forearm can generate, he'll usually come out on top.
When leverage works, it magnifies your gains substantially. Your head gets big and you think you're the greatest trader that has ever lived.
But leverage can also work against you.
You'll be broke faster than Mike Tyson can chew your ear off.
Here's a chart of how much your account balance changes if prices moves depending on your leverage.
Leverage % Change in Currency Pair % Change in Account 100:1 1% 100% 50:1 1% 50% 33:1 1% 33% 20:1 1% 20% 10:1 1% 10% 5:1 1% 5% 3:1 1% 3% 1:1 1% 1%
Let's say you bought USD/JPY and it goes up by 1% from 120.00 to 121.20.
If you trade one standard $100K lot, here is how leverage would affect your return:
Leverage Margin Required % Change in Account 100:1 $1,000 +100% 50:1 $2,000 +50% 33:1 $3,000 +33% 20:1 $5,000 +20% 10:1 $10,000 +10% 5:1 $20,000 +5% 3:1 $33,000 +3% 1:1 $100,000 +1%
Let's say you bought USD/JPY and it goes down by 1% from 120.00 to 118.80.
If you trade one standard $100K lot, here is how leverage would affect your return (or loss):
Leverage Margin Required % Change in Account 100:1 $1,000 -100% 50:1 $2,000 -50% 33:1 $3,000 -33% 20:1 $5,000 -20% 10:1 $10,000 -10% 5:1 $20,000 -5% 3:1 $33,000 -3% 1:1 $100,000 -1%
The more leverage you use, the less "breathing room" you have for the market to move before a margin call.
You're probably thinking, "I'm a day trader, I don't need no stinkin' breathing room. I only use 20-30 pip stop losses."
Okay, let's take a look:
Example #1.
You open a mini account with $500 which trades $10K mini lots and only requires .5% margin.
You buy 2 mini lots of EUR/USD. Your true leverage is 40:1 ($20,000 / $500). You place a 30-pip stop loss and it gets triggered. Your loss is $60 ($1/pip x 2 lots).
You've just lost 12% of your account ($60 loss / $500 account). Your account balance is now $440.
You believe you just had a bad day. The next day, you're feeling good and want to recoup yesterday losses, so you decide to double up and you buy 4 mini lots of EUR/USD.
Your true leverage is about 90:1 ($40,000 / $440).
You set your usual 30-pip stop loss and your trade loses. Your loss is $120 ($1/pip x 4 lots).
You've just lost 27% of your account ($120 loss/ $440 account). Your account balance is now $320.
You believe the tide will turn so you trade again. You buy 2 mini lots of EUR/USD. Your true leverage is about 63:1.
You've just lost almost 19% of your account ($60 loss / $320 account). Your account balance is now $260.
You're getting frustrated. You try to think what you're doing wrong. You think you're setting your stops too tight.
The next day you buy 3 mini lots of EUR/USD. Your true leverage is 115:1 ($30,000 / $260). You loosen your stop loss to 50 pips. The trade starts going against you and it looks like you're about to get stopped out yet again!
But what happens next is even worse!
You get a margin call!
Since you opened 3 lots with a $260 account, your Used Margin was $150 so your Usable Margin was a measly $110.
The trade went against you 37 pips and because you had 3 lots opened, you get a margin call. Your position has been liquidated at market price.
The only money you have left in your account is $150, the Used Margin that was returned to you after the margin call.
After four total trades, your trading account has gone from $500 to $150. A 70% loss! It won't be very long until you lose the rest.
Trade # Starting Account Balance # Lots of Used Stop Loss (pips) Trade Result Ending Account Balance 1 $500 2 30 -$60 $440 2 $440 4 30 -$120 $320 3 $320 2 30 -$60 $260 4 $260 3 50 Margin Call $150.
A four trade losing streak is not uncommon. Experienced traders have similar or even longer streaks.
The reason they're successful is because they use low leverage.
Most cap their leverage at 5:1 but rarely go that high and stay around 3:1.
The other reason experienced traders succeed is because their accounts are properly capitalized!
While learning technical analysis, fundamental analysis, sentiment analysis, building a system, trading psychology are important, we believe the biggest factor on whether you succeed as a Forex trader is making sure you capitalize your account sufficiently and trade that capital with smart leverage.
Your chances of becoming successful are greatly reduced below a minimum starting capital. It becomes impossible to mitigate the effects of leverage on too small an account.
Low leverage with proper capitalization allows you to realize losses that are very small which not only lets you sleep at night , but allows you to trade another day .


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Example #2.
Bill opens a $5,000 account trading $100,000 lots. He is trading with 20:1 leverage.
The currency pairs that he normally trades moves anywhere from 70 to 200 pips on a daily basis. In order to protect himself, he uses tight 30 pip stops.
If prices goes 30 pips against him, he will be stopped out for a loss of $300.00. Bill feels that 30 pips is reasonable but he underestimates how volatile the market is and finds himself being stopped out frequently.
After being stopped out four times, Bill has had enough. He decides to give himself a little more room, handle the swings, and increases his stop to 100 pips.
Bill's leverage is no longer 20:1. His account is down to $3,800 (because of his four losses at $300 each) and he's still trading one $100,000 lot.
He decides to tighten his stops to 50 pips. He opens another trade using two lots and two hours later his 50 pip stop loss is hit and he losses $1,000.
He now has $2,800 in his account. His leverage is over 35:1.
He tries again with two lots. This time the market goes up 10 pips. He cashes out with a $200 profit. His account grows slightly to $3,000.
He opens another position with two lots. The market drops 50 points and he gets out. Now he has $2,000 left.
He thinks "What the hell!" and opens another position!
The market proceeds to drop another 100 pips.
Because he has $1,000 locked up as margin deposit, he only has $1,000 margin available, so he receives a margin call and his position is instantly liquidated!
He now has $1,000 left which is not even enough to open a new position.
He lost $4,000 or 80% of his account with a total of 8 trades and the market has only moved 280 pips. 280 pips! The market moves 280 pips pretty darn easy.
Are you starting to see why leverage is the top killer of Forex traders?
As a new trader, you should consider limiting your leverage to a maximum of 10:1 . Or to be really safe, 1:1 . Trading with too high a leverage ratio is one of the most common errors made by new Forex traders. Until you become more experienced, we strongly recommend that you trade with a lower ratio.


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Leverage Forex.
It is important for inexperienced traders and clients who are new to trading Forex, or indeed new to trading on any financial markets, to completely understand the concepts of leverage and margin. Too often new traders are impatient to begin trading and fail to grasp the importance and impact these two critical success factors will have on the outcome of their potential success.
Leverage, as the term suggests, offers up the opportunity for traders to lever up the use of the actual money they have in their account and risked in the market, in order to potentially maximize any profit. In simple terms; if a trader uses leverage of 1:100 then every dollar they are actually committing to risk defectively controls 100 dollars in the market place. Investors and traders therefore use the concept of leverage to potentially increase their profits on any particular trade, or investment.
In Forex trading, the leverage on offer is generally the highest available in the financial markets. Leverage levels are set by the Forex broker and can vary, from: 1:1, 1:50, 1:100, or even higher. Brokers will allow traders to adjust leverage up or down, but will set limits. For example, at FXCC our maximum leverage (on our ECN standard account) is 1:300, but clients are free to select a lower leverage level.
With 1:1 leverage every dollar in your margin account controls 1 dollar of trading.
With 1:50 leverage every dollar in your margin account controls 50 dollar of trading.
With 1:100 leverage every dollar in your margin account controls 100 dollar of trading.
What is Margin?
Margin is best understood as a good faith deposit on behalf of a trader, a trader puts up collateral in terms of credit in their account, in order to hold open a position (or positions) in the market place, this is a requirement because most Forex brokers do not offer credit.
When trading with margin and using leverage, the amount of margin required to hold open a position or positions is determined by the trade size. As trade size increases margin requirements increase. Simply put; margin is the amount required to hold the trade or trades open. Leverage is the multiple of exposure to account equity.