A Guide to Leverage in Forex
Leverage in forex is a technique that allows traders to ‘borrow’ funds to gain greater exposure to the forex market with a relatively small initial deposit. One of the reasons so many people are attracted to trading forex compared to other financial instruments is that you can usually get much higher leverage with forex than you would with stocks for instance. However, leverage in trading can be a double-edged sword as it can magnify both profits and losses. What is leverage in forex? Leverage in forex is a way for traders to borrow capital to gain a larger exposure to the forex market. Basically, with a limited amount of capital, they can control a larger trade size. This can lead to bigger profits and losses as they are based on the full value of the position. Trading with leverage, which is also referred to as margin, means you can magnify profits if markets move in your favour. However, you can also lose all your capital if markets move against you. This is due to the fact th