Selasa, 10 November 2009

Leverage and Margin

I don't have enough money to buy 100,000 EUR, how do I?
The answer:with the use of leverage and facilities are available margin.

Illustration :

"Leverage" is like we borrow money temporarily on the company's broker with a certain amount and by providing some assurance that called the" Margin". The amount of Margin is determined by the amount of our leverage facility.Greater it's leverage ( example: 1:500 ) then the necessary guarantees were also more efficient and profitable.
( In FOREX each transaction must have margin )

Leverage is not influential in large units profit or loss us ( meaning: is not influence on the value of point ). Laverage affects only the amount of margin only. The greater of leverage You can use a lot more and more, because the required security value only slightly in the lot ( is like gun, if leverage higher the bullet that is going more and more than leverage ). Leverage is not a big imfact on the risk, because risk actually most influenced by how is your techinique trading, capital ratio, setting stop loss ( SL ), and risk management. High leverage expand your trading space and more profitable flexibility.

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