Benefits Of Forex Leverage
Forex trading is becoming increasingly popular day by day. Today more than 90% of online traders are working on Forex platform. Such popularity is justified easy access to the global foreign exchange market. A small financial sum to start and any device with Internet access is all that is needed to start trading. But it should be understood that a small deposit is impossible to make big profits. Here for help to beginners come brokerage companies. They provide the Forex leverage that allows you to operate bigger amounts than has trader.
Forex leverage is borrowed money that lends brokerage to the trader in interest-free use for making the purchase or sale transactions. Leverage benefits are obvious. It allows to the trader to open lots in the Forex market, and as a result, make a profit. As you know, the size of a standard lot in the Forex market is 100,000 units of the base currency. Not every trader can have such sum for the opening of the transaction. Broker borrows the missing funds for the transaction, and in case of success, these funds increase the profit from the deal.
Broker automatically performs credit settlement, its registration, and calculation of profit separately for each transaction, the sale or purchase of the selected trader trading asset. To pay for the use of Forex leverage is not necessary, there is no credit commission. Loan funds as a result of unsuccessful transactions cannot be lost. If the transaction is transferred to the style of a loss, with the funds in your account are starting to be ten percent of the margin, the brokerage company itself closes the deal, the order – a stop-out, at the same time does not allow for the loss of funds more than is on deposit in the trading account .