How To Prosper At Forex Trading Leverage & The K-Factor
One of the big reasons that forex trading is an entirely different animal than stock trading or futures trading is leverage. Forex trading leverage can be enormous, as high as 400:1, and in most cases you get to choose the amount of leverage or gearing you want to trade with.
Super high leverage is a selling point for many online forex brokers. How many times have you seen the tout control $100,000 of euro for $250? Those numbers are correct, and, yes, the profit potential of super high leverage is compelling.
This article neither encourages nor discourages forex trading at super high leverage. Thats a personal decision, but a decision that can only be made sensibly with a professional understanding of all the implications of leverage and what they mean to your chances of prospering at forex trading. Its probably fair to say that unless you have a professional understanding of leverage that your chance of even surviving at forex trading is slim to none.
One of the fundamental terms of forex trading is PIP. You will see that XYZ Broker charges 3 PIP per deal, or that the XY currency pair...
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