Hi guys,
I have just opened my first live account with FXCM and I put my first bid (one lot long EURJPY) and I have found that my account balance is the same as my deposit and they used my own money to bid (no leverage). I emailed them and someone replied me that leverage comes to play when you are able to purchase LARGE currency lots. Please help. How can I use their leverage?
Payman
You say you placed a bid, is this an order, and has the trade actually been opened yet.
If it’s a pending order awaiting execution then there will be no change to your balance.
Leverage is only used once the trade is open, not when placing limit orders.
Also, and this goes without saying, if you don’t understand leverage then don’t open a live account with real funds as over leveraging is the first step to destroying your account.
Hi Jezzode,
Thank you so much for your reply. I understand your point and I appreciate your help. But maybe I haven’t expressed my problem thoroughly.
I opened a live account with £1000. For my first order, I chose LONG on one lot of EURJPY(an instant execution), and I assumed that with a levergae of 1:200 (FXCM rate), only £1.25 of my own money would be involved to get control of £250 of equity. But I was wrong, and I lost £250 for my first live order (it meant one fourth of my money). After that I put five more orders, but just with 0.05 lot (not more) and I was successful in all 5, ad got £30 back, but still didn’t use any leverage, and all is with my own money. now after one hectic hay, I am £220 down, just becasue I couldn’t understand how can I use their levergae. You are right, that was my mistake, but please help me. I think maybe I opened a wrong account, becasue I even wasn’t asked for a micro, or mini or standard account, or there were no option for leverage in the form. Please help me.
Many thanks
Payman
Hi Payman,
Welcome to the forum 
By default, your account would have been set up to have up to 200:1 leverage available, but this is not reflected in your Balance, and Equity. (It would be good to mention here that Equity is what you should focus on instead of Balance, since it takes into account any profits or losses on open trades.) When you opened your account, you had an initial Equity of £1000. It’s important to note that when you trade 1 microlot (written as 1k on the Trading Station, and as 0.01 lots on MT4) then you are trading 1000 currency units.
Taking the example of your EUR/JPY trade, if you had a trade on of 0.05 lots, then that’s 5000 Euros you were trading. If there was not leverage available in your account, you would not have been able to open a trade of that size, since 5000 Euros is more than the £1000 you had in your account. In fact, you only had to set aside £25 (that’s £5 per microlot) as margin our of your £1000 in Equity to open this trade. You set aside aside 25 to open a trade for 5000. That is what is meant by 200:1 leverage.
You can also view the minimum margin requirement (MMR) for each currency pair in the Simple Dealing Rates window of the Trading Station as shown below.
In the example below, the account one open position for 5 microlots of EUR/JPY.
Notice how that corresponds to a Used Margin (Usd Mr) of £25 in the Accounts window as shown below.
Also notice how the Usable Margin (Usbl Mr) is exactly £25 less than the Equity.
The Usable Margin tells you how much money you have left in your account after subtracting the money you have set aside as Used Margin for your open trades. If your Usable Margin were to fall to zero due to trading losses, then all your open trades would be closed out automatically by the system to prevent further losses.
Please let me know if you have any further questions about leverage and margin.
Jason
Thanks Jason
My pleasure, Payman :50: