I would appreciate some help to put things right. Having some problems. I am planning to deposit with lite forex. They say that you can trade 1 usd only and they give a margin 100 000.
I read that the leverage is 100:1?? Is that 100 000?
Does that mean if i deposit 20$ then I will have 2 000 000.00 to trade with?
The other thing is the lot size, 0.1, so I put into trade 10 000 or 20 000 with 20$ bankroll?
The other thing is what they say that the margin call is 20% that means if i am to lose 200 000 then they close my deal?
Is it common to get margin calls?
Well I know this things are obvious for most of you, but I just started to learn forex…
I don’t know why they told you that. I have an account with liteforex I can trade over 40 currency pairs plus gold and silver oil commodities stocks dow jones nazdaq etc.
When they say you will have 100:1 leverage it doesnt mean you actually have $2,000,000 in your account.
You will only have the $20 you deposited.
It means when you open a trade with a 1k lot , it will be 100 times bigger than that, this is so you can make up to 1 dollar per pip of price movement, if you didnt have that leverage you would only make 1 cent per pip of price movement and it wouldnt be worthwhile doing it as you could never make more than a few cents a day.
if you make a bad trade and it loses money it would cost you 1 dollar per pip and could quickly deplete your $20 account so you should trade 0.1 lots to make or lose 10 cents per pip.
Margin call is to do with your account balance if it gets too low they will close your trades out to make sure your account balance doesnt go below the zero line, leaving you in debt to the forex broker. This is known as a margin call.