What Is Forex Laverage – Instaforex Laverage Up To 1:1000

instaforex_laverageAs we know forex laverage is one important thing to get best trade condition depending on trader style. Some trader suggest to take small laverage but in the other opinion trader need biggest laverage so trader can trade with biggest lot too to increase their profit more fast. At this situation, i choose get biggest laverage because we can trade with a big lot so we can get a fast profit too, but remember lot management still have to be counting well. Don’t forget this money management. Because actually laverage equal with drawn-down. More biggest it is mean more biggest too drawn-down allowed. Laverage in forex is expressed as ratios: 1:1, 1:50, 1:100, 1:200, 1:400, 1:500 and 1:1000.

Mathematically :Leverage in forex = Purchase Power/Capital Invested
= $100,000/$1,000
= 100


instaforex_forex_margin

This leverage ratio of 1:100 is translated as following:For every $1 I deposit in my forex broker’s account, my broker in return deposits $100 in my margin account. So, if I deposit $1000 then my broker deposits $100,000 in my trading account.

So with just $1000 of my own money, I can control $100,000 for my trading purposes. By doing so I created a leverage in forex.

How does Leverage work?
insta_forex_laverage_300x184
Example:

  • Trader A has $5000 USD – If Trader A has an account leverage of 10:1 and they wish to use $1000 on one trade as margin, they will have exposure of $10,000 in base currency ($1000) = 10 x $1000 = $10,000 (trade value).

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  • Trader B has $5000 USD – If Trader B has an account leverage of 100:1 and they wish to use $1000 on one trade as margin, they will have exposure of $100,000 in base currency ($1000) = 100 x $1000 = $100,000 (trade value).

Margin Forex is very high risk and leverage should be used wisely. In order to protect you in minimizing risk, some broker have leverage restrictions in place. To check how much leverage you can use on your account please review the table below:

insta_forex_laverage_400x123

In several broker like instaforex, laverage allowed up to 1:1000 on standard account type. Example we open on standard account at instaforex with 1:1000. We can trade minimum open lot with 0.01lot which 1 pip equal $0.01, or if open 1.0lot 1pip equal with $1. We’ve to realize that forex leverage is a “double-edged sword” it can work for you and against you. Without forex leverage we would need to put up $10,000 to buy one mini lot with a $1 pip value, most of you wouldn’t bother with forex at all. Andinsta_forex_laverage_125x83 most forex traders very like and need some leverage and usually are given more than enough. And off course with 1:1000 laverage you have a power 1000 times to trade with this currency and metal. But remember use this big forex laverage wisely.

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