The leverage that the Forex market offers makes it an attractive mode of trading to many investors. It means that a trader only has to deposit a small fraction of an asset’s market price to initiate a trade on that asset. This enables investors to trade large amounts of money on the market relative to the capital available in their accounts.
Importantly, although trading on leverage magnifies potential payouts, it equally increases the risk of a trader’s loss. For this reason, leverage should be used with caution – if misused, leverage can quickly lead to an account wipe-out from a single unsuccessful trade. This means that it really is vital for traders to take the time to learn how to trade forex, to gain an understanding of the currency market and how to use leverage before entering a trade.
Education, strategy and patience are all highly recommended when it comes to profitably trading Forex. Begin by trading with a demo account today to see if this format of trading is suitable for you.
With ETX Capital, you can trade currency pairs with leverage of up to 200:1 (or 400:1 on certain currency pairs in certain market conditions on our MT4 platform). Browse our forex spreads on currency markets (link) to explore some of the forex options that we offer.
Traders should bear in mind that leverage settings can change based on market conditions and that increasing leverage increases risk.