Leverage is one of the general terms that each Forex trader needs to be familiar with, because it will determine how much money you are willing to win or lose depending on your strategy. Leverage is an option offered by many brokers, and it will vary depending on the broker’s policy.
Keep in mind that separate brokers offer different leverage, but in most cases they’ll give you a leverage of 1:50 or 1:100. For example, if you are using the services of a broker with a leverage of 1:50, you’ll be required to invest only $2,000 in order to purchase assets worth $100,000.
Brokers that Offer 1:50 Leverage
This may sound like an attractive offer, because if you make a successful trade, you’ll get a very decent profit. However, higher leverage means higher risk, so if your deal goes bad, you’ll lose more money than you would’ve lost if you didn’t use leverage.
In short, by taking advantage of the leverage offered by your broker, you’ll borrow money from them. This is why you should be very careful when picking your Forex broker and you must always pay close attention to the terms offered by it. Some Forex brokers that offer a leverage of 1:50 are: