what is leverage in forex brokers?
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Filed under: Forex Brokers
leverage of 200:1 is common in the forex, if you put up $50 you can buy or sell $10,000 USD of any currency pair.
200 x 50 = 10,000
do the math for 100:1, 50:1 or 400:1 which is the leverage offered by forex brokers, depending on the broker.
good trading
mark mc donnell
www.forexearlywarning.com
It’s when you borrow money on top of the money you have in your account in order to multiply your profits. But using leverage also multiplies your losses, when the trade doesn’t go your way.
Here are some articles about it:
http://www.currencytrading.net/library/basic-trading-math-pips-lots-and-leverage/
http://www.forex.com/04-04-23.html
http://www.investopedia.com/articles/trading/03/091703.asp
leverage is the process of borrowing money to increase profits, but this also increases risk since you can loose even more. Its commonly practiced in arbitrary strategies, and if used correctly, you can reap huge profits without owning a thing in the first place. However, instead of loosing what you have in normal investing, you can potentially loose more than you had and that can lead to problems.