In today's episode of the FXGlobe Masterclass, Tamar Mehr offers you an overview of leverage.
Leverage can magnify profits and losses in trading, enabling you to control larger positions with relatively little capital.
However, its misuse can lead to losses. Hence, understanding how leverage works and its inherent risks is paramount for every trader.
- Leverage Ratios: Learn about different leverage ratios, how they alter the margin needed for a trade, and the subsequent changes in the trade value.
- The Amplified Effects of Leverage: Get insights into how leverage can magnify both profits and losses, making even a small market move significantly affect your account balance.
- Costs Associated with Leverage: Explore the costs of borrowing from your broker, such as borrowing costs, overnight funding, and charges, and understand their potential impact on your profitability.
By understanding the power and risk of leverage, traders can employ a robust risk management approach and optimize their trading strategy.
Stay tuned to the FXGlobe Masterclass for more insightful trading tips and strategies.
As always, happy trading!
Timestamps:
0:00 - Intro
0:30 - Small amount of capital
1:00 - Increase the size of their position
1:30 - Duration of the trade
2:00 - Ten-to-one leverage
2:30 - The damage that leverage can cause
3:00 - Trader's account
3:30 - Brokers tend to set different leverage
MORE AWESOME MASTERCLASS VIDEOS
https://youtu.be/24N-4Fp-7SY
https://youtu.be/xqCPxe7NHwU
https://youtu.be/1Rt34QaZB0Y
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