Home / Education / Trading Guide on Leverage and Margin

Trading Guide on Leverage and Margin

  • Trading Guide on Leverage and Margin

The simplest definition of leverage and margin is that the extra money which any broker gives you to trade currencies is named as margin and leverage. The leverage and margin significantly increases the profit and loss chances by increasing your trading power. The leverage and margin is actually the money which you get in addition to the actual deposit you have in your account. Deep understanding of leverage and margin is a must, before you use them for trading because the use of leverage and margin also increases your risk.

Increases Chances of Profit & Loss

Basically, the only aim of trading using margin and leverage is nothing but to magnify the chances of earning profit by taking larger trading positions then originally you can with your account deposit alone. However, the other important side of this amazing facility is that it equally increases your risk. There are chances of losing more than your initial stake.

How Leverage and Margin Works for you

Before you use the leverage and margin offered by the broker, you have to deposit a required percentage of the leverage and margin into your trading account. To understand what we actually want to make you understand, please go through the example below:

We suppose that you have opened your trading account Rexor Investments and there is USD 1,000 in your account as initial deposit. You want to trade USDJPY currency pair with the leverage 1:5. It means this leverage facility provided by Rexor Investments, let you invest in USDJPY currency pair 100 times of the value of initial deposit in your account i.e. USD 100,000.

Yes, with leverage 1:100, 1,000 USD in your account can be enough to trade with a value of 100,000 USD as well. Maximum leverage provided by Rexor Investments is 1:500. You just need to maintain the minimum deposit in to your account to hold this position because this minimum deposit works as the required margin for this trade.

Be 100% Sure About the Risks

Proper usage of the offered leverage in to your trading account is a must. You must understand that you should be careful while opening any position using increased leverage because at some point it may convert into an over-leverage position, and then you will be required to increase your deposit in to your account. This high level of leverage facility enables you making good profit from the market even with small moves. But this facility can work both ways, means you have equal chances of increasing your losses as well.

About Rexor

Rexor Investments is lead by experienced and professional team that has been associated with the Financial Industry since 2002.


Read more
Support Center

Close

Dear visitor,

It looks like you are residing in United States because your IP indicates as United States IP-address. If you are a citizen of United States, you are not permitted to use any of services offered by Rexor Investments Limited to its customers, including but not limited to opening of Demo & Live Trading Account etc.

If you consider this message appears to you as an error message and your location is not United States, please ignore this messsage and continue browsing website. Otherwise, please respect the rules and regulations, and do not use any of the services offered by Rexor Investments Limited.

If you are a United States resident and you just want to browse our website, there is no restriction on that. But, you won't be able to open Live & Demo Trading Account with Rexor Investments Limited.

We are sorry for any inconveniences caused.

For

Rexor Investments

Rexor Customer Services
info@rinvestments.com
https://www.rinvestments.com
Rexor Investments
Level 1, 1 Dickens Street,
Napier, 4110, New Zealand
Call: +64 6 824 3972

Support Center