Knowing how to trade forex isn’t the simplest of jobs. To make profits, traders should have a thorough understanding of the market, the best trading strategy, as well as the right selection of tools for trading. A tool frequently highly praised is leverage. When used properly leverage can increase an individual’s performance without the need to invest any extra capital at the beginning. This article will take a deep study of leverage, helping you determine what kind of leverage is best for your forex trading strategy and overall market strategy.
To understand the concept of leverage and the potential effects it could have one must examine two aspects specifically: leverage based on margins and actual leverage.
Margin-based leverage is calculated by dividing the amount of your transaction by the margin you must provide.
To understand the actual degree of leverage in any trading position. You must first divide the amount of your positions by the capital you invest in trading. The leverage you receive is tied to the amount of margin as well as the choice of broker.
The Most Popular Leverage Trading Strategies
Leverage trading can be integrated in almost every trade strategy for forex. It is however more effective when utilized when paired with specific strategies for trading. When trading for short-term is the goal, leverage can be quite an effective tool in trading. Two strategies for trading aren’t just popular and effective, they also use leverage efficiently.
Scalping is a very popular strategy for trading forex and is often coupled with an approach that is high leverage to the market. People who choose to scalp typically use high leverage levels, with anything between 1:1000 to 1:3000 being the norm. They also open low spread trades for pairs, and set tiny pip targets to make up for the higher amount of exposure. Risk control can also be quite strict with tight-take profits as well as stop losses as a result.
The main advantage that scalping offers over other methods of trading is speed; the scalp trader can close out positions in just minutes, if not in seconds. It allows traders to move swiftly, placing more trades and investing greater capital in the trading window. Because of the leverage effects that leverage has, it’s not uncommon that a trader earns up to 15-20 percent of their equity in a single day, provided they take on the risk of extreme risk.
Leverage trading in Forex is a technique that allows traders to be able to borrow funds from brokers to take on larger opportunities than they could using only their deposit. This allows them to take advantage of potential more significant methods when they forecast the direction of a specific currency pair. Although leverage trading increases profits however, it can also increase the chance of losses in the event that something goes wrong. In this regard when using a high leverage forex broker can be a good idea for novice traders, they shouldn’t opt for the most leverage as soon as they can.
It is worth noting that the IC Markets Trading Company has numerous Investment programs that allow its customers the opportunity to earn an income that is passive. These are the programs that are most well-known among them.
● Investment Manager
This program is only available to clients who have MAM and PAMM accounts. This program allows users to gain access to Raw Pricing application that is based on the high liquidity and low spread. IC Market also facilitates this program by offering technical assistance to its customers.
● White Label
This product is intended to be used by Financial Management and accomplished brokerage firms that have a solid customer base with a monthly turnover of at least 500 million dollars. Traders who make large-scale transactions as well as corporate clients are also able to use the product.
IC Markets affiliate program
Every customer regardless of experience or the volume of transactions, is able to be a participant in a program. The role of the participant is to find new customers. The payment is based on the “percentage of profits” principle. Commissions are paid out in a real-time manner to the trader’s account.
➔ Do the opinions of traders affect ratings by IC Markets?
Each review may alter or improve the rating of a broker within the general listing of brokers. To read about IC Market review you need to visit the profile of the broker.