Forex Trading Basics Part-5
Tuesday, December 4th, 2007Understanding Margin and Leverage : Forex Trading Basics Part-5
Understanding Margin and Leverage
Being able to trade on margin is one of the greatest advantages of forex trading. You can purchase large quantities of currency while only putting up a small fraction of the full value.
You may hear some people refer to “leverage trading” and other to “trading on margin”. In forex trading, they refer to the same thing, just in different terms.
Leverage is usually quoted as a ratio such as 100:1.
This simply means that you can trade 100 units of currency while only putting up 1 unit. In other words you would only need to put up $1,000 in order to trade $100,000. (more…)
