Leverage question

[jaswhite16]

Hello everyone!
One quick leverage question. When you say you trade at a leverage of 1: 50 or 1:25
what are you saying exactly and what does this mean interms of dollars or price.
thanks for your response in advance.

[daydreamer65]

Hello everyone!
One quick leverage question. When you say you trade at a leverage of 1: 50 or 1:25
what are you saying exactly and what does this mean interms of dollars or price.
thanks for your response in advance.

From the babypips school.

Lots, Leverage, and Profit and Loss | How Do You Trade Forex? | Learn Forex Trading

[Dominator4fx]

Hello everyone!
One quick leverage question. When you say you trade at a leverage of 1: 50 or 1:25
what are you saying exactly and what does this mean interms of dollars or price.
thanks for your response in advance.

In Forex markets currencies are traded in Lots.

1 Standard Lot = 100,000 units

For EURUSD trading 1 Standard Lot will require 100,000 Euros

Normally retail traders do not have that kind of money with them invest.

So Broker who has High Liquidity provides them with Leverage.

It simple means that your 100$ invested is 100x into the markets

where x = Leverage

For 1:50 Leverage

100$ will become $5000

1000$ will become $50,000

3000$ will become $150,000

You will need $130,000 for trading 1 lot EURUSD given the rate of 1.30

[s1quash]

If it was not because of leverage we all would not be able to trade currencies. When someone say they trade say they use 1:200 leverage, it might mean that their account is leveraged to 1:200 but it doesn't mean that they will all the time use the
leverage given. Leverage is needed to open a position. If you have 50k and 1:100 leverage you may open a bigger position
than 50k on 1:50 leverage.

Please use leverage wisely as it is a double-edged sword. My advise only use 1:50. You will lose money on a slower pace.

Remember good traders assess risk first before profits. Calculate your would be losses first before entering any position.

;-)