High Leverage in Forex Trading – Good or Bad? - The Merkle Hash

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High Leverage in Forex Trading – Good or Bad? - The Merkle Hash

High Leverage in Forex Trading – Good or Bad? - The Merkle Hash

Posted: 30 Aug 2019 05:06 AM PDT

There are many ways to see success in Forex trading, depending on how much effort you're willing to put into the whole ordeal. While certain methods will generate slow, but steady success, others involve higher risk, but also higher potential rewards. You will keep learning about the ins and outs of these different approaches as you keep exploring the Forex market itself. For now, it's important to focus on understanding some of the most common terms in the field, and how they relate to your particular trading efforts.

High leverage is something you might see referenced often, and people tend to be very divided in their opinions of it. The truth is that it has its ups and downs, just like most other tools in the field, and you have to learn what to expect from it.

Defining High Leverage

You might have heard of leverage as margin trading, because that's a more popular name for it in some circles. The basic idea is that you're using borrowed money for your investments, allowing you to work with some more attractive positions and other great conditions. You get your leverage from traders looking to make a deal. Traders themselves can pick a degree for the leverage, with some going as far as 1:1000.

What this means for you is that investing just $10 could result in a potential of $10,000 for the trader. Of course, this is not commonly encountered, and requires you to scout the market carefully if you want to land such deals. The point is though, you can gain a lot from taking some time to search around and compare what's available. 

Benefits

One of the main benefits of high leverage trading is that it allows you to invest even with a low availability of funds. It's also the main reason for many to look into the option in the first place, and it's easy to see why so many traders keep flocking to high leverage trading when they realize how little money they need in order to get started.

In the end, you're treating your money like something that has the opportunity to increase in value in the future. You can do so with very little money, converting it to much bigger sums if you're successful. But it's going to take some time until you start to spot the best deals.

High leverage trading also comes with no interest attached, which can be a huge benefit to those looking to maximize their profits over a longer term.


Disadvantages

The main reason you would want to be careful with high leverage trading is that you could potentially lose a lot. If you get your predictions wrong, you can find yourself paying a lot for those mistakes. You will also be held liable for your investments on a constant basis, in a way that's much more different from what you're likely used to when trading in the traditional way.

Last but not least, you also run the risk of not being able to fulfill the required transaction volume that was set out by the broker. In this case, you will likely see your entire portfolio liquidated to cover any losses, which can incur significant hits to your own finances.

What Does This Mean for You?

In the end, high leverage Forex trading is something that can easily turn the tables in your favor, but you have to play your cards right to make proper use of it. It's not an automatic button for success, and in some cases, it even carries certain risks that you'll have to be very careful about. As long as you know how to manage those problems though, you will likely find high leverage trading to be a huge boost to your potential on the market.

Keep your eyes open though – it's a dynamic market, and a lot is changing on a regular basis. When it comes to high leverage trading, we keep finding new things that can improve the way it's applied. And if you don't pay attention to the overall state of the market and just stay focused on one spot, you risk missing out on a lot of important information that could potentially be quite useful to you.

If you're not sure how to proceed, talk to your broker. One of the good things about high leverage trading is that it's not hard to find support for it, as it's quite the popular tool on the market. You will be able to find multiple specialists who can give you valuable tips on how to make the most with your high leverage trading. And it's a good idea to take full advantage of those tips, because they can sometimes make all the difference between success and failure in this field.

Disclosure: This is a sponsored press release

What you need to know about Forex trading - The Standard

Posted: 15 Aug 2019 12:00 AM PDT

The foreign exchange market is largely made up of institutional investors, corporates, governments, banks, as well as currency speculators.Unlike the stock market and future markets that are housed in central physical exchanges, the foreign exchange market is an over the counter market, decentralised market completely housed electronically.Though investors are familiar with the stock market, they are unaware how small it is in comparison to the forex market that is the largest financial market in the world open 24 hours a day, five and a half days a week.

SEE ALSO :Forex provider AM Broker enters Kenyan market

There are many benefits and advantages of trading forex. Nevertheless, key among them is that there is no waiting for the opening bell.From Sunday evening 8.30pm GMT to Friday Evening 9pm GMT, the forex market never sleeps.This is awesome for those who want to trade on a part-time basis because you can choose when you want to trade: morning, noon, night, during breakfast, or in your sleep.Because the forex market is large, it is also extremely liquid.This is an advantage because it means that under normal market conditions, with a click of a mouse you can instantly buy and sell at will as there will usually be someone in the market willing to take the other side of your trade.

SEE ALSO :CBK warns public against foreign exchange dealers

You are never 'stuck' in a trade.You can even set your online trading platform to automatically close your position once your desired profit level (a limit order) has been reached, and/or close a trade if a trade is going against you (a stop loss order).You would think that getting started as a currency trader would cost a ton of money. However, when compared to trading stocks, options or futures, it doesn't.Online forex brokers offer mini and micro trading accounts, some with a minimum account deposit of Sh2,500.We're not saying you should open an account with the bare minimum, but it does make forex trading much more accessible to the average individual who doesn't have a lot of start-up trading capital. 

SEE ALSO :Rid Kenya of unlicensed forex dealers

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ForexStock ExchangeForex Trading

Retail forex trading set to go live today - Economic Times

Posted: 05 Aug 2019 12:00 AM PDT

Mumbai: A new retail currency trading platform goes live today enabling thousands of small businesses to trade at market prices, possibly ending years of complaint that banks cream them off with opaque contracts and fees in currency transactions.

The Clearing Corporation of India's electronic trading platform would enable exporters and importers to trade in US dollars at market prices, which banks and other brokers have access to. This would help traders improve their profitability while banks may lose some portion of their revenues.

"The platform provides for an anonymous and order driven dealing for the retail customers where they can place orders and trade in the USD/INR currency pair," said R Sridharan, managing director, CCIL. "Customers can directly place, hit, modify, cancel orders on the platform."

forex-graph

CCIL's retail foreign exchange electronic trading platform comes after years of complaints to the regulator by exporters and importers that they get a raw deal from banks through which they buy and sell foreign exchange. Banks charge a hefty fee for foreign exchange transactions crimping the margins of traders as the quantity in most cases small and that the market is not accessible to a large section of businesses.

The RBI began this process of improving the transparency in the foreign exchange market in 2017 and gave a final notification this year. The trading would be handled by Clearcorp Dealing Systems India, a subsidiary of CCIL. Although companies could have live trading screen they have to settle their trades through their banks and they don't have direct membership with Clearcorp. A bank, which is an authorised currency dealer, has to set the trading limits for its customers who would settle the transactions through the associate banks.

This move would address the transparency issue. "As it was over phone, some authorised bank dealers used to make the most of it especially when it comes to little-known clients," a trader said. So, total cost used to be derived after adding margin and risk premium over and above the market rate."

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