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What Is Leverage? Forex Leverage Explained - Forex Trading

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http://goo.gl/bRKoqt - Click Link To Open A Free eToro Forex Account. https://www.casinoeurope.club - Best Online Casinos For The Europe Market. What is leverage in Forex trading? Traders in Forex trade a contract of currency exchange rates. As the movement of currency rates can be very small, traders use leverage to increase their profit potential. Here is a step-by-step, practical example: You decide to open a contract for trade and it has these elements in it: The currency pair for trading -- e.g. EUR/USD The direction of the trade -- BUY euro and SELL US dollars The price -- say 1.3500 The contract value -- EUR 100,000 As the trader, you purchase this contract, believing you will profit once you close (offset) the contract. If you are right (for example: the rate increased to 1.3600), then you would profit: for every euro in this contract you made profit of 1 US cent. In total, the profit would be $1,000 (100,000 x 1 cent). However, do you need ALL the EUR 100,000 to open this contract? The answer is: NO. You can LEVERAGE the trading: the trader is required to risk, for example, only 1:100 of the contract value. Accordingly, for a contract of 100,000 only $1,000 is needed. However, if there was loss, and the value of the WHOLE contact dropped to 99,000, then the deal is automatically closed, since the "guarantee" made by the trader was only $1,000. With leverage, you have more money to use for trading than the balance in your account because you can 'leverage" what you do have -- that means you use what you have to increase the amount you can trade and to increase your profit when you succeed in trading in the right direction of a currency pair. On the other side, when there is a loss: the higher the leverage, the quicker you are subject to automatic closure of your deal. source: easy-forex http://www.pipsandspreads.com http://www.youtube.com/watch?v=OVn8fAMAh6U
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Text Comments (98)
Steve Harris (4 days ago)
Ayula Jmr (22 days ago)
What is Trabeplom System? Does it work? I hear lots of people making some BIG cash in the foreign exchange with this popular forex secrets.
muttaqina sanzida (29 days ago)
Leverage is an important trading tool from among trading elements. The higher leverage is risky but very profitable to make huge profit rapidly. I always prefer the higher leverage and this is why I select Forex4you as my trading broker. They give 1:1000 leverage that is almost very high to make high profit. I have no fear to loss much because I am using their advance risk management technology to control my trading risks.
First Dude (1 month ago)
A little educational info is always helpful. Thanks.
TwoStarII (2 months ago)
I am trading on a demo micro (or nano, please correct me) lot (size = 0.01) with leverage 25:1 but my trade is moving as follows for each pipette: $0.01, $0.02, $0.03 etc.. but since I have leverage of 25:1 shoudn't it move like this $0.25, $0.50, $0.75 or am I missing something?
TwoStarII (2 months ago)
to add onto this, I am in profit of 10 pips which is $1 but shoudn't I have $25 because of leverage? I need help
Dave Treen (3 months ago)
Not sure you got your maths correct in this vid but still useful leverage explanation for newbies. I get 1:500 leverage for forex with my broker, hugosway.
fried IT (3 months ago)
Im so glad i chose to use MR... for my investments.. fill in the blank
WikiFX APP (4 months ago)
Hey, I’m WikiFX, so nice to meet you.
Darlene Borges (4 months ago)
I never knew trading would be this profitable. Coming in contact with Mr Elton Jonathan has changed my life for good
Darlene Borges (4 months ago)
+jeremy ashley here is his contact info. {[email protected] Com}. Feel free to get along with him
Darlene Borges (4 months ago)
No better trader than Mr Elton. I'm confident having a trader like him to trade on my behalf
Erik Heil (5 months ago)
How can you minimize your losses in a leveraged investment? The only way is to maintain your leverage at as low a level as possible and choose the right forex broker like Bprimes. While it is true that investing with borrowed money can give you higher returns, leverage is a double-edged sword. If the value of your investment falls, your losses will be much higher in a leveraged trade or investment.
Dave Kinowaski (6 months ago)
AAFX 1:2000 leverage for USA and most worldwide. spreads 0.9 to 1.0 EUR/USD. That is always lower than forex.com 1.3 or oanda 1.2 to 1.3 that I experienced and traded with. The other pairs are usually even more advantageous in lower spreads with AAFX. use my referral link: http://clients.aafxtrading.com/ref/?id=2132556256 I've had success with this brokerage. They allow hedging and you can open and close trades in any chronological order! That was a serious set back with other brokerages. I practiced with a practice account that allowed hedging and closing at any time. Then I tried oanda and forex.com and struggled to be as profitable. There is a referral that you can apply for to after trading. Learn to trade and always set stop losses to manage risk.
ahsanullah shanto (6 months ago)
We actually go for a high leverage issuing broker and yet many traders are seeking for a high leverage issuing broker. As a high leverage providing broker today I am recommending Trade12 broker who equally distributed their leverage into several of their accounts. Their leverage amount is 1:400.
Sharief Najjar (7 months ago)
NAJJAR INVEST.. Tursted & Guaranteed Forex Signals (++24500 pips - 2018)..http://www.najjarinvest.com/forex.signals
maria e barahona (7 months ago)
http://myimarketslive.co/tradeeasyy Here you can learn a lot and make money referring people
Oliver Rautenbach (8 months ago)
So can someone please tell me what is a safe leverage for beginner trader that wants to keep risk low
Money Mule (3 months ago)
1:1 👌🏽
Luca Testa (8 months ago)
https://www.bitmex.com/register/0PYJvQ Users who have registered with a valid affiliate link will receive a 10% discount for 6 months lever 1-2-3-5-10-20 50-100 X
Miguel Castillo (8 months ago)
Even if the housing market were to go up, this example does not take into account taxes or the interest on the loan; therefore this is a highly over simplification of leverage trading. Sounds to me that leverage trading is borrowing in order to invest which is exponentially worse if your bet doesn't go your way and you have to pay that money back.
Naveed Saleem (10 months ago)
hi, im using bitmex.com, I used 10x leverage, but when I earn 10%, I only got 10% of my actual investment, like I invest 100$ with 10x leverage means it should be invested 1000$ and 10% profit should be 100$. but I only earned 10$. so I don't know what's the benifit of using Levearage
Rajeev Maηick (11 months ago)
This guy is wrong!!! if you take 100000 from the bank you still have to pay 10-15% interest per annum to the bank! so selling the house for 150000, doesn't give you a profit of 50000! Go and check your maths.. but other than that, a nice review.
I think the example is ok. In Forex you do not have to pay interest.
bauer florin (1 year ago)
Choosing the right account manager is very important and I hope you make the right decision because it’ll matter a lot especially for someone who is new in forex trading. I would not recommend you any system other than this great software of MR MICHEAL . especially for someone who is new in trading...He has really change my life,trading for me..contact him if you really want to make it .. [email protected] .com
theoder catalin (1 year ago)
For all who have consistently lost trades and openings i strongly recommend that you contact MR MICHEAL who's trading strategies has proven to be one of the best so far when it comes to trading. i make over $40,000 consistently weekly with his strategy. feel free to reach him via this mail address... [email protected] .com
i remember leveraging bitcoin on etoro. i didnt know what the fuck l was doing but a 100% profit is a 100% profit
linda owens (1 year ago)
A true manager is someone who wants to see you through and someone who wants to see you achieve your dreams of life, Mr Williams has been so faithful to me by helping me with his strategy that's why i call him a true manager and a trade god
linda owens (1 year ago)
Contact him via [email protected] com
mrdojob (1 year ago)
So basically it's debt that you'll also need to replay if the market takes a tumble while you're trading someones else's money on it? No personally I think using loaned money on the stock markets of all places is a fucking stupid idea. I'ts not an attack against the uploaded because he didn't decide to invent leverage but I have no idea why people can be that stupid.
Jonathan G. (1 year ago)
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Stealthe (1 year ago)
christella gate (1 year ago)
Awww that's my Mentor in Forex trading so knowledgeable
Andy Paolo (1 year ago)
Super. Thanks
Maxwell Gonzales paul (1 year ago)
Awesome strategist is what i call him . His trend prediction in Forex is like one who sees the future. The combination of Finbo and MKT gives super accurate output.
Irene Wesley (1 year ago)
Bruce i so much share in your thoughts , the rate at which this is going has proven a lot of bookers wrong and thanks for your recommendation, so much has been said about Wayne.
ween ween (1 year ago)
Leverage has risk attached I must say, especially when you trade with high leverage and you lose at such point, your losses would huge as well. But forex is all about risk and having the proper risk management can go a long way. I currently trade with https://tenkofx.com/ offering up to 1:500, but I use this leverage with caution.
Jibon Ali (1 year ago)
Newbies often underestimate the influence of leverage on trading or even don't understand completely what negative and positive impacts it gives. I try to reduce my leverage to diminish trading risks, for example now I use 1:100 leverage on my Forex4you zero spread account, its much safer comparing to 1:1000 as trading risks are reduced 10 times. We should make our leverage as small as its possible.
Lamar Dorsey (1 year ago)
How much of that leverage do you have to pay back? How is it paid back? In commission?
Lula Williams (1 year ago)
Looking for a technique to earn from Foreign exchange. Google and search "Forex Profiter V3.1".
Ingrid Cox (1 year ago)
Amazing Eventually worked well
Michel Stuart (1 year ago)
Thanks for sharing such wonderful video with us. I get 2000:1 leverage form my broker AAFX and I was wondering how I can manage to use this huge power for benefit of my account. I know that high leverage is a bit risky for trading but I am trying to learn it. I must appreciate your work. As I am new and I want to learn more about leverage and its usage I want you to make some detail video about this topic.
Shoeb Asif (1 year ago)
Thanks for the video. You are doing great work for newbies like us. I am a learner from your channel. I watched all your video. I have doubt about leverage. Now it is crystal clear now. I am trading with CapitalsTrade with high leverage 1:500 and using their mt4 multi platform. If you could tell me about what will be my risk ratio and how I set my stop loss.
Nice video.
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Sim já estou nesse patamar a oito anos só fica tudo Escrito no salte muitos Bilhões
Svetlana Gulimova (1 year ago)
Yes, sure, 50K gain! But what about the loan that you have to pay the bank? In case you buy a small studio for your own capital, you don't pay mortgage. How can you make 50K profit if you owe the bank 80K? What a bullshit.
Alexander Tai (1 year ago)
So if I invest £1000 on a stock & it goes down I'm in -£1200 of money. Can I leave it minus till the price rises back up or will the broker chase me asking I've lost -£200 and I need to give it back to him...?
Joe Joe (3 months ago)
If you invest 1000 in a STOCK you can only lose 1000...the price of a stock cannot go below zero. Currency exchanges are not stock markets.
Money Mule (3 months ago)
File for bankruptcy
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ZEN TV (2 years ago)
are you guys mad 100:1 that is serious risk bros.
Rate Me (7 months ago)
Lol ye it really is a joke, look at the copied and pasted messages, its quite hilarious tbf
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afiqku man (2 years ago)
this is really helpful thanks
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Amancio Robert (2 years ago)
Hello Guy's
Tough Minded (2 years ago)
Amancio Robert
Tough Minded (2 years ago)
Amancio Robert
avarei soon (2 years ago)
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Maxwell Gonzales paul (2 years ago)
Great info
Amancio Robert (2 years ago)
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Anderson (2 years ago)
Can you give me an example of what happens when you use leverage and lose money? For example, what would happen to the investor in the 5:1 leverage example if the 100k home had depreciated in value by 20k, making it worth 80k?
Drew (2 years ago)
You lose 20k! ... your entire deposit. If you sold at that point (bad idea) you would only have enough to pay the 80k back to the bank (and would still be out of pocket on some interest etc)
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Keila Whatley (2 years ago)
i would like to try this one for sure
Nia Defner (2 years ago)
i'll try this tools, i need to change somethind in my life.
Issa Ouattara (2 years ago)
Can we increase leverage for option trading ?
Alhasby Pranaja (10 months ago)
Yes, you can increase leverage for Options, but only with a good strategy that has a reliable risk management. I use *Blended Model Strategy* on options earning in a high leverage of about 72% increase in profit. this strategy has a less risk management, less stress when you apply and more profitable. checkout the *Blended Model strategy* by Dmitry Vladislav, read more information and contact to get started with it.
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ashwadhwani (3 years ago)
NOt fully informative about how risk acts out. It's a salesmanship ad.
Person Al (3 years ago)
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Maruf Hasan (3 years ago)
I notice many people keep on speaking about Trabeplom System (just google search it). But Im not sure if it's good. Have you ever tried this popular secrets?
NickSheridanCuts (5 years ago)
Right, but how do losses work? Say I invest £10 at 1:5, and the market completely dies (unlikely/impossible I know). I'm down £10, but do I now owe £50 to someone?
Alhasby Pranaja (10 months ago)
Yes, you can increase leverage for Stocks, but only with a good strategy that has a reliable risk management. use *Blended Model Strategy* on stocks earning in a high leverage of about 72% increase in profit. this strategy has a less risk management, less stress when you apply and more profitable. checkout the *Blended Model strategy* by Dmitry Vladislav, read more information and contact to get started with it.
Alexander Tai (1 year ago)
So if I invest £1000 on a stock & it goes down I'm in -£1200 of money. Can I leave it minus till the price rises back up or will the broker chase me asking I've lost -£200 and I need to give it back to him...?
NickSheridanVids (4 years ago)
Indeed, I've found over time that trading indexes (once past the steep learning curve) is much better than specific investments. There is risk, but as you say, checking out at just 5% profit is a substantial gain compared to bank accounts, and before long you can trade with just your profits, and put aside the original investment.
SeraphinMr (4 years ago)
Glad to hear it, both that I made sense to you and you rejecting said investment opportunity. :) I'm a bit passionate about finance, so forgive me for going on and on and I hope I don't come across as condescending, but I want to give one more piece of advice: don't invest in individual companies. Chances are, you don't have the information available to professional traders, and therefore can't assess a company's value as well as they can. There's little to no money to be made from trading stocks, but if you hold a portfolio of different stocks, dividend payments and equity growths may provide a better return than a savings account with a bank. :)
NickSheridanVids (4 years ago)
It still made sense to me! You've just reminded me of a friend of a friend who came up to me in a club and told me he was buying shares in a plane, and wanted investors. I was not in for that :P

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