.gif "Know Leverage In Forex")
As a trader you should have an understanding of leverage in forex because it is important to know before you plunge into the world of trading . Moreover specifically for beginners in the world of forex . By understanding leverage , then you will surely know how the best way to manage your finances in your trading activities daily . Leverage can be defined as the use of active funds in which to use such a company must cover fixed costs or fixed load . While the Forex itself , leverage it can be interpreted as we borrow money while at the brokerage firm with a certain amount and to provide a number of guarantees called the " margin " . The amount of margin is determined by the amount of leverage the facilities we have, the greater the leverage offered eg 1:200 then the less assurance that we need to spend. More efficient and profitable .
Leverage No Effect on unit size of a Profit and Loss Meaning : there is no effect to the value of pips ( points ) . However, High Leverage means also contain a higher risk anyway .
Leverage the value will not affect the amount of pips . Leverage has no effect on the amount of profit or loss unit . Because leverage only affects the magnitude of the margin . So the leverage scheme we use the greater , then you can use the Lot which the more necessary because the value guarantee only slightly in the Lot . Because of the leverage effect only on the magnitude of margin only. However, please note if high leverage , meaning will carry a consequence of its own . Keep control the power of your lot that can exceed the normal strength of your capital .
Leverage No Effect on unit size of a Profit and Loss Meaning : there is no effect to the value of pips ( points ) . However, High Leverage means also contain a higher risk anyway .
Leverage the value will not affect the amount of pips . Leverage has no effect on the amount of profit or loss unit . Because leverage only affects the magnitude of the margin . So the leverage scheme we use the greater , then you can use the Lot which the more necessary because the value guarantee only slightly in the Lot . Because of the leverage effect only on the magnitude of margin only. However, please note if high leverage , meaning will carry a consequence of its own . Keep control the power of your lot that can exceed the normal strength of your capital .
Kinds of Leverage
Here is the leverage that is often encountered in the forex:
1: 1 which means the bail money = 100% contract value (equal to 1:1 without leverage).
1: 50 which means bail = 2% of the contract value.
1: 100 which means bail = 1% of the contract value.
1: 200 which means bail = 12:50% of the contract value.
It is recommended not to use the leverage is too low as 1:1 or 1:50 because it would require substantial capital. Ideally is 1:100 and 1:200. Leverage the higher the risk is also higher if not used properly. Therefore, with high leverage, sometimes making traders forget to factor capital adequacy ratio and risk.
Description : Warranty = Margin Assurance ( margin ) will be returned to your account balance portfolio again in full after your order closed position or diliquid . Account Types Trading account types commonly found on forex :
1: 1 which means the bail money = 100% contract value (equal to 1:1 without leverage).
1: 50 which means bail = 2% of the contract value.
1: 100 which means bail = 1% of the contract value.
1: 200 which means bail = 12:50% of the contract value.
It is recommended not to use the leverage is too low as 1:1 or 1:50 because it would require substantial capital. Ideally is 1:100 and 1:200. Leverage the higher the risk is also higher if not used properly. Therefore, with high leverage, sometimes making traders forget to factor capital adequacy ratio and risk.
Description : Warranty = Margin Assurance ( margin ) will be returned to your account balance portfolio again in full after your order closed position or diliquid . Account Types Trading account types commonly found on forex :
- Micro Account ( Micro Lot ) : With units ranging from 0.01 lot , the minimum capital is recommended in these accounts is $ 250 .
- Mini Accounts ( Mini Lots ) : With units ranging from 0.1 lot , the recommended minimum capital in this account $ 250 .
- Regular Account ( Standard Account / lot) : The unit started 1 lot , the minimum capital is recommended for this account $ 5,000
Description : Forex broker is not all require the trader to make a deposit with a certain value when the client wants to be , but it was all taken from the global brokers who have been recommended by the master forex . So every Brokers Minimum Deposit certainly have differences . From the brief description of Leverage in Forex , you may be able to better understand and manage your finances when making a deposit .
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Forex is not something to fear, but fear when you are not able to control yourself in the forex or whatever. When profit in forex it becomes your personal responsibility, and when you lose in forex it also becomes your personal responsibility. Forex simply as a facility to achieve financial freedom, no more no less. Forex is a place to think realistically.
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