Forex leverage represents credit facility enabling a trader penetration in the trading contracts that require huge investment while having a nominal amount of real cash available in his trading account.
Forex Leverage is the amount of money obtained through credit commonly provided by the brokers. Leverage ratio established on the agreed amount of marginal account deposit that is mutually agreed between the investor and broker at the time of opening a forex trading account. Leverage ratio depends on the margin ratio. 100:1 leverage means that for every $1 a trader can put a trade worth $100.
For example, for putting the trade amounting to $100,000 a trader needs to have $1000 in his account by using the 100:1 leverage.
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