How The Leverage System Works At Forex Market?
Forex Leverageis a system that provides an opportunity for making transactions with much more Money volume than the deposit Money amount. This system is seemed as an advantage of Forex Market. The Forex Traders must have a deposit amount at the beginning. If they use the leverage system, they can make transactions with the amount allowed by the leverage rate. For example; you have 100.000 dollars as deposit and use 1:10 leverage rate; this means you can make transactions 100.000×10=1.000.000 dollars! Forex investors like this feature of Forex and if their Forex knowledge and experience is well they can make really big profits at this market.
Forex Leverage Is Profitable But Be Careful For The Risks
Forex Leverage System can be profitable and make you happy and profitable at the Forex Market. You know that you can earn much more Money than the real amount you have at the beginning! The level of leverage rate is a decisive factor in that situation. Which leverage rate you use, you can make profits in according to this level. Again we explain this by an example; you purchase an investment instrument at 100 dollars and sell it at 120 dollars; this means you make profit by 20 dollars. But as a result of the leverage rate that you used of 1:10 level, you will earn 20×10=200 dollars! This is a profitable transaction but see the risk now: You purchase it at 100 dollars and sell 80 dollars, you lose 20 dollars. But the leverage rate affected this loosed amount negatively and loses will be 20×10=200 dollars!
New ForexInvestors Should Choose The Low Leverage Rate
Forex Leverage Rate has two serious effects as we explain above. This can be positive or negative but it is clear that Forex Market is required information and experience. Don’t behave too risky before you analyse the Market well.