Newbie - Leverage Query
Forum on trading, automated trading systems and testing trading strategies
Sergey Golubev, 2016.12.26 10:34
True Leverage (based on the article)
What is Leverage in Forex?Leverage is your total maximum possible borrowing ratio.
What is Margin in Forex?Margin is the minimum cash deposit required by the broker to cover any open trades. It is sometimes expressed as a percentage.
What is Position Size in Forex?"Position size" is the quantity of what is being traded.
A "margin call" is when your broker tells you that you do not have sufficient funds in your account to cover all your liabilities.
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Leverage in forex = Purchase Power/Capital Invested = $100,000/$1,000 = 100
Some more for understanding:
MetaTrader 5 Help → Trading Operations → For Advanced Users → Margin Calculation: Retail Forex, Futures
Margin Calculation: Retail Forex, Futures - For Advanced Users - MetaTrader 5 Help
- www.metatrader5.com
The trading platform provides different risk management models, which define the type of pre-trade control. At the moment, the following models are used: If the account has an open position, and an order of any type with the volume being less or equal to the current position is placed in the opposite direction, the total margin is equal to the...
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I have set up a demo account and getting to grips with the figures and calculations
my demo acc has $100k and a leverage rate of 100:1
does this mean that although my acc has a balance of $100k im actually utilizing up to $10m