Leverage
“Leverage” or “gearing” is one of the key principles of Forex trading. Using this option you can multiply your gains depending on the way you trade. Thus, you can deposit $1,000 but actually trade $100,000, resulting in a 100:1 leverage factor. Accordingly, 1 pip in a losing position makes $10.
The available leverage levels at FXOpen:
- 1:100 - for accounts with balance less than $1,000
- 1:1 - 1:500 - for accounts from $1,000 up to $25,000
- 1:1 - 1:200 - for accounts from $25,000 up to $100,000
- 1:1 - 1:100 - for accounts from $100,000 up to $1,000,000
The leverage for accounts with the balance of over $1,000,000 is negotiable.
The basic principle in leveraged trading is as follows: the higher the leverage, the higher the trading risks. A beginner at Forex is advised to keep to the “golden middle” and choose the standard leverage parameter of 1:100.
