Basic Introduction To Leveraged Forex Trading.

Basic Facts About Forex Trading The Forex, also know as FX is the international currency exchange market is the most liquid financial market in the world with estimated daily turnover of $4 trillion.
In Forex Trading investors can open long or short position on various currency pairs such as USD/EUR, USD/JPY, GBP/USD, GBP/EURO and so on.➤▷⓹➤
Retail Online Forex Trading involves Leverage that enables traders to execute trades that exceed the fund they actually deposit. Leverage provide traders the opportunity to gain significant profits with even small changes in exchange rates.On the other hand, it also magnifies their losses
By using Leverage, the profits potential is almost enormous. Forex broker offer leverage ratios of 25:1,50:1, 100:1, 200:1 and even 300:1.
Since the potential for huge losses is also exists, even to an extent which exceeds the trader’s deposits, there are two mechanisms Forex Brokers apply.⒗➬➬
The first is Stop-loss this is predetermined point by the trader which defines in which rate he wishes to close his position. The position will be closed automatically when the exchange rate will touch the stop-loss point. Defining a stop loss by the trader costs a fee.➆➙❱
The second is forced liquidation- A forced liquidation is when the trader’s positions are closed automatically by the broker to prevent further loss and ensure the trader will not default on his loans.