What is Forex Leverage?
Forex leverage is a tool that enables financial transactions to be carried out on top of the main currency owned by the shortest definition. It is a Forex strategy that enables transactions to be made in larger volumes compared to less capital and capital, and avoids the need to capitalize in large amounts for investment. It is also considered to be investing in debt. If the Forex leverage system is not used, you can get $ 50 if your account has $ 100 and 1 USD = 2 TL.
When you do this, you are expected to appreciate against USD against TL and if 1 USD = 2,5 TL, your investment will be 50 * 2,5 TL = 125 TL and you will earn 25 TL from this transaction. If Forex leverage system is used for the same transaction, the situation changes as follows; Your capital will trade 100 TL but with a leverage ratio of 100 to 1.
You can get $ 50 from 1 USD = 2 TL while you can get $ 5,000 after your leverage will be 10.000 TL. USD rises against TL and if 1 USD = 2,5 TL you can win 2500 TL with leverage effect. The Forex leverage system allows you to make high investments with little capital. However, the more he gains, the more he can misuse it. If you trade using leverage, the curse will be inevitable if you are looking at the opposite of your expectation and you are going through a big deal. Care must be taken when handling the leverage ratio, to be applied by experienced persons, and to determine the correct leverage rates. What is the leverage ratio? The Forex leverage ratio is the number that determines how much volume you can trade with the amount you will invest. For example; With 1000 TL, you will invest at 1 USD = 2 TL using 1: 100 leverage ratio.
If you set the leverage ratio as 1: 100, you can get 50 thousand USD worth 1000 TL x 100 = 100 thousand TL. If the dollar appreciates against TL and if 1 USD = 2.1 TL, your money will be 105 Thousand TL. In this case you will earn 5000 TL over 1000 TL with this investment. Let's think of the opposite scenario. You invested 1000 TL again, you used 1: 100 leverage, and you traded at 1 USD = 2 TL. Your transaction volume is the same as the first sample and you have received USD 50 Thousand worth USD 100 Thousand. Market conditions changed; this time the TL gained value against the USD, and the value of 1 USD = 1,8 TL. In this case you have 50,000 x 1,8 = 90 thousand TL. Under these conditions you will have lost 1000 TL and 10.000 TL.
However, as the exchange rate changes are realized step by step, before reaching 10000 TL loss, when the loss of 1000 TL comes, the position you open will be closed and you will lose all your guarantees. The leverage ratio varies from country to country.
The leverage of the United States can be up to 1:50, while in Turkey, up to 1: 100. The leverage ratio is determined by the CMB applied in Turkey. In other countries there are different ratios, but in general leverage ratios around the world are applied up to 1: 400. In other words, a person with US $ 50 capital in the US can trade for up to $ 2500; In Turkey, the process can be performed more than 5000 USD.
Forex leverage is a tool that enables financial transactions to be carried out on top of the main currency owned by the shortest definition. It is a Forex strategy that enables transactions to be made in larger volumes compared to less capital and capital, and avoids the need to capitalize in large amounts for investment. It is also considered to be investing in debt. If the Forex leverage system is not used, you can get $ 50 if your account has $ 100 and 1 USD = 2 TL.
When you do this, you are expected to appreciate against USD against TL and if 1 USD = 2,5 TL, your investment will be 50 * 2,5 TL = 125 TL and you will earn 25 TL from this transaction. If Forex leverage system is used for the same transaction, the situation changes as follows; Your capital will trade 100 TL but with a leverage ratio of 100 to 1.
You can get $ 50 from 1 USD = 2 TL while you can get $ 5,000 after your leverage will be 10.000 TL. USD rises against TL and if 1 USD = 2,5 TL you can win 2500 TL with leverage effect. The Forex leverage system allows you to make high investments with little capital. However, the more he gains, the more he can misuse it. If you trade using leverage, the curse will be inevitable if you are looking at the opposite of your expectation and you are going through a big deal. Care must be taken when handling the leverage ratio, to be applied by experienced persons, and to determine the correct leverage rates. What is the leverage ratio? The Forex leverage ratio is the number that determines how much volume you can trade with the amount you will invest. For example; With 1000 TL, you will invest at 1 USD = 2 TL using 1: 100 leverage ratio.
If you set the leverage ratio as 1: 100, you can get 50 thousand USD worth 1000 TL x 100 = 100 thousand TL. If the dollar appreciates against TL and if 1 USD = 2.1 TL, your money will be 105 Thousand TL. In this case you will earn 5000 TL over 1000 TL with this investment. Let's think of the opposite scenario. You invested 1000 TL again, you used 1: 100 leverage, and you traded at 1 USD = 2 TL. Your transaction volume is the same as the first sample and you have received USD 50 Thousand worth USD 100 Thousand. Market conditions changed; this time the TL gained value against the USD, and the value of 1 USD = 1,8 TL. In this case you have 50,000 x 1,8 = 90 thousand TL. Under these conditions you will have lost 1000 TL and 10.000 TL.
However, as the exchange rate changes are realized step by step, before reaching 10000 TL loss, when the loss of 1000 TL comes, the position you open will be closed and you will lose all your guarantees. The leverage ratio varies from country to country.
The leverage of the United States can be up to 1:50, while in Turkey, up to 1: 100. The leverage ratio is determined by the CMB applied in Turkey. In other countries there are different ratios, but in general leverage ratios around the world are applied up to 1: 400. In other words, a person with US $ 50 capital in the US can trade for up to $ 2500; In Turkey, the process can be performed more than 5000 USD.
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