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Forex question Leverage Isnt a Bad Thing
avatar BoyceAve
Question by: BoyceAve - 02 Aug 2016, 00:26:46
Leverage Isnt a Bad Thing
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Answers (1)
avatar user 10286
Answer by: JustinJones - 02 Aug 2016, 00:55:13

Leverages as we know are expressed in ratios as a leverage ratio of 100:1 makes you to be able to control a $100 with $1 in your account. This means that you will be able to control $500,000 with just $5,000 (depending on the margin requirements of your broker). While this sounds amazing when you are winning; but when the trade goes wrong, an over leveraged account makes it easier for your account to be blown even getting a margin call. It is best to use moderate leverages preferably less than 10:1.

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