28
Feb
2014

Margin Traders

At the moment brokers offer their clients leverage from 1:1 to 1:500. However, traders do not use all available leverage. Why? A trader should use leverage only if the current trend is wrapped in its side. A trader should plan a deal and know exactly where out of it if the market moves in the desired direction. As soon as it becomes known approximate level of risk may determine how much money will be lost, if triggered stop-loss traders.

Typically, this loss should never exceed 5% deposit. If the position is strengthened by a shoulder so that it becomes possible loss of, say, 50% of trading capital, the shoulder should be reduced, while the possible loss is reduced to 5%. However, each trader has their own risk parameters and it may wish to deviate from the usual 5% in either direction, so for example, many traders raise this level of the maximum loss of up to 10% or even 15%. In other words, if the rate goes against you, then you should be willing to lose on each trade no more than 5-10% of the total amount of your deposit. The larger the leverage, the smaller settlements should go against the currency you to get such a loss. Thus it becomes clear why the more leverage, the higher the risk of a loss limit.

Hence it follows that the higher the leverage, the greater the amount of profit at the same magnitude of exchange rate fluctuations. Traders should also be noted that the greater the amount of money available for trading, the easier and safer to use the shoulder. Since Margin position may lose money as quickly as bring them, the trader must have enough equity (funds), which would work as insurance against any "drawdown" (margin call). The meaning of marginal risk is that traders are using borrowed money to purchase or sale contract. If the market does not move in a favorable direction, the losses are multiplied by a multiple of that used shoulder. Often the brokers themselves give traders the maximum level of drawdown, so for example in the InstForex margin call is 10%. InstForex is ECN-broker providing quality services to trading in the market Forex. Cooperation with the largest market makers and brokers, contractors, coupled with an extensive client base InstForex provide high liquidity and the ability to offer truly fast service to its customers.