When it comes to choosing between a forex broker with a leverage of one thousand and one hundred, you ll need to consider your risk profile and overall trading style before making a decision. Using high leverage may appear lucrative, but is not recommended for everyone. Some countries have banned the use of high leverage for this reason - they want to protect their citizens from too much loss. In this article, we ll look at the different options available, and the benefits and drawbacks of each.
A trader using a 1:100 leverage will only be able to use one hundred dollars of account balance to open a trade. However, a trader using a leverage of one thousand will only need a hundred dollars to open a position, leaving $900 of his account available to discover new trading opportunities. This is a huge difference that makes it vital to research different types of leverage. The following comparisons will help you decide which type of account is right for you.
Before selecting a leverage level, it s important to understand what one means for you. If you re a beginner, a leverage of one thousand is likely to be too high. The reason why you should only use a leverage of one thousand is that it allows you to make larger trades. As a beginner, you should avoid trading with a high leverage of one thousand, as it increases your risk and can cause you to lose your account balance in a matter of days.
High leverage is a popular choice for the so-called scalpers. In Forex trading, scalping is a strategy where a trader holds a position for only a few minutes or seconds. This type of trading allows for the most money per trade. This is an interesting strategy, but it is not for beginners. It is also illegal in the US. Traders in this country can choose between a 1:500 or one:1000 leverage forex broker to suit their financial situation.
When choosing a high leverage broker, make sure to understand how the two types of leverage work. High leverage means that you ll have to borrow more money than you ve put up. With a leverage ratio of one thousand to one, you ll have to deposit at least US$20 to protect your margin against losses. This can be dangerous for those who don t understand the risks and don t want to take a high risk.
Besides offering high leverage, FSCA regulated brokers offer excellent customer service. With a minimum deposit of two hundred dollars, Plus500 offers over 2,000 CFDs across seven asset classes. A high leverage forex broker will offer maximum leverage as allowed by the Monetary Authority of Singapore MAS. An ECN account will have lower bid-ask spreads and no trading commission, which is best for experienced traders.