market. Used and free margin together make up your equity. Investors use leverage to significantly increase the returns that can be provided on an investment. . In case you are a client accustomed to telephone trading and we feel that you cant maintain your open positions, you may receive a margin call from our dealers, advising you to deposit a sufficient amount in order to maintain your open positions. Leverage Risk On the one hand, by using leverage, even from a relatively small initial investment you can make considerable profit. For example, if the currency underlying one of your trades moves in the opposite direction of what you believed would happen, leverage will greatly amplify the potential losses.

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In order to protect himself, he uses tight 30 pip stops. Are you starting to see why leverage is the top killer of forex traders? Your true leverage is about 90:1 (40,000 / 440). You loosen your stop loss to 50 pips. If prices goes 30 pips against him, he will be stopped out for a loss of 300.00. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value. What does this mean? Standard trading is done on 100,000 units of currency, so for a trade of this size, the leverage provided is usually 50:1 or 100:1.

The next day, you re feeling good and want to recoup yesterday losses. Forex now and I little beat confused with leverage. I understand that it is impossible to trade without it, but.