The forex leverage is an important investment tool on the global forex market. With the globalizing world conditions, we can observe the price changes are occurring frequently in the trading time periods daily. So, it will create a risk factor for beginners. This higher volatility with forex leverage, of course, is providing higher risk factor. So, the concept of forex leverage may be dangerous for the beginner traders on the global forex market. Because, each trader may lose a lot of money in a short time period with a smaller price changes.
For example; if you are buying a position (1000 USD) of 1,15 on EUR/USD parity with 1:100 leverage ratio, the 0,01 price decrease will cause a serious risk. Let’s see your risk ratio :
100*1000 : 100000 USD. You will have a loss like you are trading with a 100000 USD capital. So, it will be 100 times bigger than your normal loss.
As a result, higher earnings in the forex market that allows you to sign into leveraged transactions attracts the attention of all investors. When it is used correctly, enables you to earn outrageous figures. For this, you must understand the forex training with demo accounts and by taking advantage of the market logic in details. After you create real account strategies that will bring profit by successful investors achieve high returns with the help of analyses of hourly daily.
- Date: 05 October 2016 Wed 16:19
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