The Concept of Forex Leverage

Evaluation that enables the rapid accumulation of a magical world for forex investors. The reason for this is after each step toward the expectations to obtain high gain. Because forex trading volume is higher compared to other markets. According to the official data, there is more than 7 trillion USD in daily cash flow experienced. These expectations can be met on a daily basis is proof. In this regard separate from the place of, especially leveraged transactions. Huge amount of money in a short time, making it possible for even small amount of many investors to reach for as the eye is seen.

What is forex leverage?

The forex leverage is providing to make trading with higher amounts instead of your real capital. Let’s explain it with a realistic example:

You are making buying – selling transactions on the global forex market.
Your capital is : 100 USD
You’re buying a position of EUR/USD parity with the market price of : 1,10
If you are using 1:10 leverage, let’s calculate: 100 USD x 10 : 1000 USD.
So, you will make trading as you have 1000 USD on the market.

But, when the leverage ratio increases, your risk will be higher. Because, forex market is the most liquid market of the world, therefore you may earn or lose a lot of money in a short time period. Before using a forex leverage, you have to gain some experience on the global forex market.