The leverage/margin option doesn’t seem straight forward to me. I have a demo account and I don’t see it. Where do I see my leverage? Is it set automatically? How do I change it? The broker is forex(dot)com
Pretty please.
@99john… Please refer to the Babypips School of Pipsology for more information on this…
Leverage simply refers to the maximum amount of money in multiples of your deposit that your broker allows you to trade with.
An example is if you deposit $1000 in your demo account and your broker offers a 200:1 leverage when you signed up, then you can trade a maximum cumulative position size worth $200,000.
Margin refers to the actual fraction of your deposit that your broker removes from your $1000 balance (@ 200:1 leverage, the margin becomes 0.005%) and keeps as a good faith deposit in order to control the actual cost of your trade…
An example is you bought 1lot of EURUSD which costs $100,000. Your broker opens a buy position for this trade amount and sets aside $500 of your deposit (0.005% margin) for the trade…
You can find the margin details (used and free) on the bottom section of the Trade terminal on MT4 platform if you use one.
However leverage isn’t shown as it is assumed you are aware of the maximum leverage your broker offers when you signed up, and can calculate your true leverage from your trade details.
Don’t worry if you find any of these confusing, a few minutes reading up on Leverage and Margin Explained should clear things up.
1 Like
Go to your account sittings; you’ll have that option in there!
1 Like
Leverage is a basic trading facility that will facilitate a trader borrowing capacity when he will have shortage of funds or he does not want to put large amount of money from his pocket. With the use of leverage a trader can borrow funds against the initial level of margin from his broker. However, though leverage is quite impressive, with high leverage any trader can expose to higher trading risks.
1 Like