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Leverage
Leverage in trading is otherwise known as "leverage". (from English leverage), which means "leverage". Leverage in trading works similarly to the action of a lever, which helps to multiply the force and significantly facilitates the lifting of heavy objects: a higher rate at a lower cost. For example, a trader wants to open a trade on the EUR/USD currency pair with a 0.05 lot size. Having studied the margin requirements, he realises that the leverage will be 1:40. This means that the trader will get 40 borrowed euros for 1 euro of his own. Thus, it is possible to open a deal of much larger volume than the deposit allows. A broker or a dealer cannot risk his own funds. Therefore, when opening a deal, he freezes on the trader's trading account the amount sufficient to repay his liabilities. Its size depends on the size of the deal and leverage. The frozen funds are called margin. In essence, it is a collateral security allowing the trader to use leverage and the broker to save his money.

Risk Warning

Before embarking on Forex trading, it is essential to thoroughly evaluate your investment objectives, level of experience, and risk tolerance. Never allocate funds that you cannot afford to lose.

Off-exchange foreign exchange transactions carry significant risks, encompassing leverage, credit risk, limited regulatory protections, and market volatility. These factors can significantly influence currency prices and liquidity.

Furthermore, the leverage inherent in forex trading means that market fluctuations can result in substantial gains or losses relative to your initial investment. If market conditions go against you, you may risk losing your entire initial margin and be required to inject additional funds to maintain your position. Failure to meet margin requirements may lead to position liquidation and subsequent losses for which you bear responsibility

Before embarking on Forex trading, it is essential to thoroughly evaluate your investment objectives, level of experience, and risk tolerance. Never allocate funds that you cannot afford to lose.

Off-exchange foreign exchange transactions carry significant risks, encompassing leverage, credit risk, limited regulatory protections, and market volatility. These factors can significantly influence currency prices and liquidity.

Furthermore, the leverage inherent in forex trading means that market fluctuations can result in substantial gains or losses relative to your initial investment. If market conditions go against you, you may risk losing your entire initial margin and be required to inject additional funds to maintain your position. Failure to meet margin requirements may lead to position liquidation and subsequent losses for which you bear responsibility

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