Forex Trading – All You Need To Know About Leverage

To be able to hold positions of huge value, without investing large amounts, is what makes Forex trading one of the most lucrative and appealing fields in the trade market. Leverage is a sum which traders borrow from brokers, to access larger positions in a trade. This is a huge boon because you don't require thousands in the capital, to enter the markets. Several novices have a tough time figuring out what leverage is, and how to use it efficiently! Even the slightest bit of carelessness can lead to tumbling losses.

An Overview of Leverage:
 

Everything about Leverages in Forex Trading

Unlike several other financial commodities, Forex provides the option to work with little capital and make big money. Another point to note is that in foreign exchange, leverages goes up to a mammoth ratio of 100:1! This means, for every $100 you have, you can trade up to $10,000. This comes in handy while trading currencies; the Forex trading market is immensely liquid, and to make a good sum, you have to invest a solid amount! 

Starting off, not many Forex traders can invest in huge amounts; for beginners, leverage is an incredible boon and bane all the same. Without knowing how to control the borrowed sum, you can potentially lose a lot more than just your investment capital!
 

When you borrow money and enter a trade, winning it will yield a tremendous sum of money! However, losing a leveraged trade will lead to losing your trade investment and the borrowed capital together. This is the prime reason several Forex players end up in piling losses. Being unable to control leverage properly will lead to disastrous outcomes. Over 85% of Forex traders end up losing their initial trades due to their inability to work with leverage!
 

Is Leverage Beneficial?
 

While it may gift you with large profits, it has the power to do the opposite as well. Leverage is a deciding factor in Forex. Victory or loss is governed by how you utilize this benefit. The best way to learn to leverage without losing money is practicing on a Forex demo account. This virtual platform will provide you with the means to try out different strategies, features and work with Forex leverage. Once a grip is established over it, you will learn how to apply it in live trades and make a good winning!
 

Forex without leverage would be immensely difficult! With the right broker by your side, you can learn the art swiftly, and pave a path to consistent wins. Call WesternFX today and hire our world-class brokerage! We will equip you with a stellar platform for demoing and live-trading, and provide winning strategies! Dominate Forex trading in Sri Lanka with our superior trade solutions.