The Concept Of Leverage In Forex

One of the main attractions to trade forex is big leverage and allows currency traders to borrow money and use that money to to profit from the fluctuations in exchange rates between two currencies. The leverage usable in forex trading is one of the highest that traders can obtain. Leveraged trading means that you are not required to pay the full value of the trading position but only small part of it.

Because of the big leverage in foreign exchange, traders are able to make large investments without a huge amount of trading capital, whereas in other financial markets such as the stock market, investors would have to pay 50% of the full amount for each share they were investing in.