Leverage currency trading

Our USDX complex includes futures, options on futures and mini USDX futures. The futures contract is a leading benchmark for the international value of the U. Pairs cover standard and million-unit size contracts, and are available for half-tick trading, trade at settlement, EFP and block trading. Euro, the UK pound and the Yen. Interested in trading FX futures and options? Want to find out more about clearing?

Let’s discuss leverage and margin and the difference between the two. We know we’ve tackled this before, but this topic is so important, we felt the need to discuss it again. Your leverage, which is expressed in ratios, is now 100:1. This is also called 1:1 leverage. Of course, I think 1:1 leverage is a misnomer because if you have to come up with the entire amount you’re trying to control, where is the leverage in that? Fortunately, you’re not leveraged 1:1, you’re leveraged 100:1.

Now we want you to do a quick exercise. As you can see, these clichés weren’t lying. It is used by your broker to maintain your position. Margin is usually expressed as a percentage of the full amount of the position. Based on the margin required by your broker, you can calculate the maximum leverage you can wield with your trading account. Margin required: This is an easy one because we just talked about it.

It is the amount of money your broker requires from you to open a position. Account margin: This is just another phrase for your trading bankroll. It’s the total amount of money you have in your trading account. While this money is still yours, you can’t touch it until your broker gives it back to you either when you close your current positions or when you receive a margin call. Usable margin: This is the money in your account that is available to open new positions. Margin call: You get this when the amount of money in your account cannot cover your possible loss. It happens when your equity falls below your used margin.

If a margin call occurs, some or all open positions will be closed by the broker at the market price. How Much Trading Capital Do You Need For Forex Trading? Are You Doubling Your Risk Without Knowing It? Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes. We introduce people to the world of currency trading, and provide educational content to help them learn how to become profitable traders. We’re also a community of traders that support each other on our daily trading journey. By selecting these links you will be redirected to OANDA Corporation webpages.

These services are provided by OANDA Corporation, an NFA regulated firm based in the United States. CURRENCY PAIRS Currency pairs are always listed in the same order. For example, the most commonly-traded currency pair consists of the Euro and the U. USD and never the reverse order. SPREAD The SPREAD is the difference between the two prices.