Trading Leverage attaches great importance in forex trading, allowing traders to trade much bigger sums than you have placed, resulting in considerably larger gains than if you were trading with a lower amount.
However, higher trading leverage provides traders with additional opportunities, and it also comes with significantly more risk.
High leverage is typically preferred by experienced or advanced traders to satisfy their aggressive trading strategies.
While forex beginners are recommended to stick to a low leverage level first. Here is the list of high leverage forex brokers in 2022. Keep in mind that you can tolerate the great risks of losing your money.
A Multi-regulated Broker for you to Start Real Trading with a $1 Initial Deposit.
Incredibly Unlimited Leverage Offering for Asia, Rare Among Brokers.
A reputable forex broker requires as low as $50 to start trading.
Generous leverage up to 2000:1, significantly satisfying your trading ambition.
A FCA-regulated broker that offers spread-based fees and STP execution.
Leverage up to 1:1000 will satisfy even the most aggressive traders.
A Stringently Regulated Broker, Reliable and Safe to Trade With, The Choice of Over 3500,000 Clients from Over 190 Countries.
Quick & Easy to Start Your Real Trading by Funding As Low As 5 USD, Lower & Friendlier Cost Structure Available, Advanced Trading Platforms & Tools Drive You Succeed into the Forex World.
An ASIC regulated broker comes with great reputation.
Outstanding investment prospects and unique access to trade shares and options on CommSec.
Account opening is easy and digital with this well-regulated broker.
Spreads offered are among the tightest in the industry, 24X7 professional and responsive customer support.
In brief, leverage in currency trading refers to the money that a trader borrows from their broker to invest a larger amount than they want to use themselves.
This sounds like a good way for traders to protect their own capital by using only small amounts of their own money and borrowing the majority of it from the exchange.
Consequently, this privilege comes at a price as brokers charge traders an interest rate on borrowed funds, known as the swap fee or overnight interest.
Picture this scenario, you set up a standard lot position on EUR/USD, you will need $100,000 capital.
If you use a low leverage broker platform with 3.33% margin requirements, you will need at least $3,333 to set up this position. In contrast, if you trade with high leverage brokers in the list above, you would only need $200 (that is a 0.2% margin) in order to effect the same trade. Same trade size, same profits/losses.
As a result, you can choose leverage amounts that suit you. Consider using leverage of 1:200 (e.g., a margin of 0.5%) instead of very high leverages (e.g., 1:3000) if you are more comfortable with them.
With the best high leverage brokerage companies, you have more choices without being boxed into a corner with very few leverage options available.
The amount of leverage available in forex trading varies depending on the broker, as well as the regulation and location where you are trading.
Typically, regulated brokers with high leverage limit it around 50:1, as is the case under the IIROC in Canada.
Some market regulators are even stricter, such as ESMA in Europe, the FCA in the UK, and ASIC in Australia, which limits leverage to 30:1. MAS in Singapore limits leverage even lower, to 20:1.
The international regulatory bodies, such as the IFSC based in Belize, the FSA based in Seychelles, and the FSA in the British Virgin Islands, provide the greatest leverage.
Below you will find a list of maximum leverages allowed by various regulatory authorities.
|Assets||ESMA & FCA||ASIC||MAS||Offshore*|
|Major FX pairs||30:1||30:1||20:1||Discretionary|
|Other FX pairs & gold||20:1||20:1||20:1||Discretionary|
* it refers to International market regulators
Reading the guidelines published by ESMA on leverage caps, you will notice that trading leverage is only limited to 1:30 for forex majors if you are a retail trader.
There is still the option for institutional traders to use high leverage, sometimes as high as 1:300. If high leverage were always bad, why was it not scrapped by ESMA? Institutional traders enjoy high leverage, but retail traders do not?
This can be explained by the fact that institutional traders usually receive professional training and proper instruction on risk management and position sizing.
An institution's internal risk control mechanisms ensure that no trader goes beyond allowable risk. Additionally, team leaders oversee all operations closely.
The concept of volatility is also very well understood, so leverage is deployed according to how volatile a market is, and higher leverages are used in markets that are less volatile.
There is really no problem with leverage in and of itself, but with retail traders' tendency to abuse it and take on too much risk as a result. For traders, it is almost natural to want to assume significant risk, and limiting leverage won't change that.
Leverage caps will only serve to increase traders' risk appetite by requiring them to come up with more money to fund such risky trading. Due to this, the focus should shift from using leverage, whether low or high, to ensuring traders follow the rules of position sizing and risk management to the letter.
Here's our list of 10 high-leverage Forex brokers that would be excellent for a trader wanting to dabble in margin trades. The question is, with so many options out there, how do you pick the right high-leverage forex broker?
As long as you use a trustworthy platform, trade responsibly, and follow basic risk management guidelines, you shouldn't have any problems.
Of course, selecting a reliable broker is the first step. The first thing you should consider in that regard is the level of leverage. The idea of high leverage is certainly appealing, but not to an absurd degree.
The broker itself essentially lends you money for a particular trade when you use a high-leverage trading strategy. But if you aren't familiar with a broker and they are offering greater than 1:2000 leverage, this may cause concern.
If you think about it, how could a liquidity provider operate on the forex market handle leverage of this magnitude? RoboForex, for example, has millions of users and has been in the industry for more than a decade - but not every broker has this level of reputation.
There are some fraudulent brokers that may promise you high leverage by executing overlapping trades opposite yours, which indicates a bucket shop, which simply wants to scam you out of your hard-earned money. Additionally, if a broker refuses to let you trade directly with the raw market spread, you shouldn't trust them.
Novice brokers may consider this trivial, but the quality and speed of the customer service of a broker are excellent indicators of how trustworthy the platform is.
Customers of honest, professional brokers always get their needs met - their customer service is always available to answer questions, and they may even work around the clock to meet those needs.
In addition to looking for someone with high leverage, you should also look for someone who is versatile - a broker who offers a wide array of different trading instruments is likely to be more reliable than someone who only offers a few.
Choose a broker that offers crypto, binary options, metals, indices, stocks, CFDs, and currency pairs.
Other subtleties should be considered as well. Forex brokers who offer zero-swap Islamic accounts are likely to be global players with a greater pool of traders - and low swaps on major currency pairs are indicative of a professional broker.
When it comes to choosing your first broker, you should consider more than their reputation and leverage. Many brokers provide free training materials for novice traders as well as comprehensive educational programs.
For you to succeed, powerful analytical tools, as well as a large network of traders fostered by your broker, are essential. The use of social trading features such as copy trading is a must.
Leveraged products such as forex and CFDs don't require you to own the entire amount you're trading. Retail traders only need a small deposit. This is called the initial margin. It covers the possibility of possible losses.
For example, if a forex broker offers 30 times leverage (30:1 leverage ratio) and you want to buy 10,000 EUR/USD units, your margin requirement is only USD 380.
Your total position value is only a fraction of the margin requirement. Even with the highest leverage available (500:1), US$20 is all that is needed. For this reason, you can control USD 10,000 with just USD 20.
Traders benefit from leveraged trading because they get to use larger amounts of money without risking their own money. Their potential reward is higher if they trade correctly, while their personal wealth is less exposed to risk.
In the right circumstance, leverage can be an extremely powerful tool for traders. However, they should be aware that leverage comes with risk, so the greater the leverage, the smaller the margin of error.
Leverage ratios usually can be considered good or bad based on many factors. For example, the higher the leverage, the greater the risk, as more money is at stake, which is more stressful and riskier, as you have less margin for error and more to lose.
To put it another way, traders need to decide which leverage ratio they are comfortable with. In addition to that, traders must also decide on a trading strategy, and choose a leverage ratio that fits their strategy.
As a final point, traders should consider the market trading conditions traders prefer. For example, crypto trading is extremely risky without leverage, which is why most brokers do not offer particularly high leverage when trading in this market. While due to forex’s lower volatility, higher leverage is possible.
Typically, forex brokers will quote you two different prices for currency pairs in your forex trading: the bid and ask price.
The “bid” is the price you can sell the base currency. The “ask” is the price at which you can buy the base currency. The difference between these two prices is called “spread”.
The spread is usually measured in pips, which is the smallest unit of the price movement of a currency pair.
For most currency pairs, one pip is equal to 0.0001, for example, the bid/ask price of the EUR/USD pair is 1.1053/1.1055, then the spread is 2 pips.
Currency pairs involving the JPY are typically quoted to 2 decimal places. For example, USD/JPY would be 125.00/125.02.
This quote indicates a spread of 4 pips. There are two types of spreads：Fixed Spreads and Variable (Floating) Spreads.
Spreads can be wider and narrower depending on the currency pair involved. Apart from spreads, there are also some commissions and other fees involved.
Commission fees usually vary from $1 to $5 generally for opening up any opposition. Some additional fees that a forex broker charges include inactivity fees, monthly or quarterly minimums, margin costs and fees associated with calling a broker on the phone.
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