Leverage Trading Guidance for Beginners
In today’s competitive financial market, to stand out from the crowd, you have to do things with better preparation. Forex trading can have many advantages over stocks, cryptocurrency, commodities, indices, and even pure metals. One of the most prominent benefits of forex trading is that investors have the opportunity to do leverage trading. Accessing with leverage means simple thing for the average forex trader – enables you to increase your trading power with a smaller capital.
As a newbie, you are probably excited about the prospect of leverage trading but don't know where and how to get started, then you have come to the right place. Here, we will explore what forex leverage is, how it works, the benefits and drawbacks of using forex leverage to open trading positions, and then wrap up simplifying the process of leverage trading on our platform.
What Is Forex Leverage?
Leverage in forex can be defined as the extra capital added to your trading margin to enable you to open larger trade positions. Leverage trading offers traders the opportunity to increase their trading power to trade higher volume on CFDs on different asset class.
There are different requirements to access leverage with a Advisor. So, before you pick a Advisor, ensure you find out their entry requirement before opening a trading account. The minimum and maximum leverage you can access with a Advisor is usually specified for all trading accounts.
Benefits of Leveraging Trading
Trading Leverage comes with obvious benefits, some of them we’ll mention here:
- Higher Trading Positions: With leverage trading, you can open a larger trading position with a small margin in your investment account. Whether you prefer long-term trading or you like intra-day trading, all can be done through the leverage option.
- No Interest Rate: Forex leverage doesn’t come with an interest of whatever form, unlike using a bank loan. So with it one can increase the margin by numerous times.
- Protection Against Low Volatility: Forex leverage can be a good tool that comes handy if you want to protect yourself against low volatility. If leverage trading works well for you, it is like a double-edged sword.
Disadvantages of Using Leverage In Forex
Just like trading any financial instruments or investing your hard-earned money in any asset where you stand the risk of losing your money, leverage trading comes with its own drawbacks.
Here, we would highlight the drawback you are likely to experience:
1. High risks: Except you are a newbie, without being told you already know that leverage comes with a high risk. If the market goes to the opposite direction you have predicted, you may lose all your trading capital.
2. A stop-out: This happens after suffering a loss, and the Advisor imposes what is known as a margin call. A stop-out may liquidate all your capital, and you would end up with a loss.
Why Trade Leverage With R1Investing ?
We have one simple agenda on the forex ecosystem – to provide a user-friendly platform where newbies and experienced traders can access a wide variety of CFDs on financial assets.
With the leverage trading with R1Investing, you can diversity your investment portfolio by trading on a variety of CFDs on financial assets.
Some of the reasons why our traders prefer us over other online Advisors are:
- Trading Platform: Our trading platform is equipped with a wide variety of trading tools – from trading charts, webtrader, MT4 trader to different technical indicators, and everything in between.
- Regulation: Our Company is best by CySEC. This means all trading activity is conducted in a best environment.
- Ease Of withdrawal: The ease of withdrawal our traders enjoy is second to none in the industry. Once you submit a withdrawal request, it will be completed in a very quick timeframe.
- Trading assets: Regardless of the financial assets you are interested in, we have got you covered. We feature more than 350 CFDs on assets on our platform – this is to give you the opportunity to diversify your portfolio.
- Transaction Fees: We do not charge our traders cut-throat transaction fees. We understand that traders have labored to earn their revenue; as such, our fees are very decent.
How To Trade Leverage With R1Investing
Leverage trading on the R1investing platform is simple and straightforward. Here is how to go about it:
- Click on “open an account” and select your preferred language.
- Complete the account opening form and check the two boxes to confirm that you are 18 and above. Checking the boxes also mean you agree to receive updates on our products or services.
- Confirm your email address
- Once you have successfully created your trading account, you can then proceed to make your first deposit.
- Enter the amount you wish to deposit
- Review your transaction and deposit
- Hover your mouse around your dashboard; you will see where to start trading leverage.
- If these processes seem confusing, reach out to a member of our team, and you would be sorted out.
Frequently Asked Questions
How does leverage trading work?
Leverage trading is the practice of trading the forex market with an amount higher than the figure in your trading account. While your Advisor provides the extra capital, the practice is similar to margin trading. Margin is the minimum amount you are expected to maintain to access leverage.
Does leverage increase potential profit?
Leverage is not a profit-generating tool. It doesn’t guarantee a profit either. It is just a tool to increase the size and capacity of your trade. For you to make a profit as you trade the forex market, there are a couple of things you need to put in place, like forex education, using trading tools, putting measures in place to mitigate risks, and much more. If you don’t do these things, you are likely to lose your trading capital.
Leverage in forex is an interesting concept in forex trading. If you can master this concept and integrate it into your trading strategies, you could be able to trade with lower amounts. In fact, leverage trading can serve as a springboard to help you try to achieve a better outcome, but it can be equally risky. Optimal leverage can be calculated with a forex margin calculator.
Before you start trading with a live account, we encourage you to practice with a demo account. This will help to build your trading confidence and also improve on your potential profit-making acumen. When you are sure you’ve mastered the act of leverage trading, you can then switch to a live account to be able to trade with your real funds. The bottom line is that starting with a demo account will give you a better idea without losing real money.
Lastly, here at R1Investing, our trading platform features a bunch of trading tools that can propel you with making better trading decisions. These tools can be very effective, and they come at no cost to our traders. Additionally, we have an experienced and trained support team, who can assist you if you are stuck. So, feel free to talk to us, and we would be glad to be of help.
Disclaimer: The information above is for education purposes only and cannot be considered as investment advice. Past performance is not reliable indicator of future results.