http://www.forexconspiracyreport.com/why-use-leverage-in-forex-trading/ Why Use Leverage in Forex Trading? If you are new to currency trading you have heard of leverage but are not quite sure what it means. What is the point of leverage in Forex trading and why use it? Investopedia discusses how leverage is used in Forex trading. “Leverage” in general terms simply means borrowed funds. Leverage is widely used not just to acquire physical assets like real estate or automobiles, but also to trade financial assets such as equities and foreign exchange (“forex”). Forex trading by retail investors has grown by leaps and bounds in recent years, thanks to the proliferation of online trading platforms and the availability of cheap credit. The use of leverage in trading is often likened to a double-edged sword, since it magnifies gains and losses. This is more so in the case of forex trading, where high degrees of leverage are the norm. If your company buys products from other countries you will often pay in foreign currencies. Here the common practice is to use Forex options and leverage is not an issue. Currency speculators, however, use leverage in Forex trading to enhance profits. And, of course, they run the risk of enhanced losses as well.

1. Why Use Leverage in Forex
Trading?
By www.ForexConspiracyReport.com

2. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
If you are new to currency trading
you have heard of leverage but
are not quite sure what it means.

3. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
What is the point of leverage in
Forex trading and why use it?

4. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Before We Continue…
Click the links below to get your
FREE training materials.
Free Weekly Investing Webinars
Don’t miss these free training events!
http://www.profitableinvestingtips.com/free-webinar
Forex Conspiracy Report
Read every word of this report!
http://www.forexconspiracyreport.com
Get 12 Free Japanese Candlestick Videos
Includes training for all 12 major candlestick signals.
http://www.candlestickforums.com

5. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Investopedia discusses how
leverage is used in Forex
trading.

6. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
“Leverage” in general terms
simply means borrowed funds.

7. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Leverage is widely used not just
to acquire physical assets like
real estate or automobiles, but
also to trade financial assets
such as equities and foreign
exchange (“forex”).

8. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Forex trading by retail investors
has grown by leaps and bounds
in recent years, thanks to the
proliferation of online trading
platforms and the availability of
cheap credit.

9. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
The use of leverage in trading is
often likened to a double-edged
sword, since it magnifies gains
and losses.

10. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
This is more so in the case of
forex trading, where high degrees
of leverage are the norm.

11. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
If your company buys products
from other countries you will often
pay in foreign currencies.

12. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Here the common practice is to
use Forex options and leverage
is not an issue.

13. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Currency speculators, however,
use leverage in Forex trading to
enhance profits.

14. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
And, of course, they run the risk
of enhanced losses as well.

15. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
All about the Pips

16. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
A pip is what measures the
amount of change in exchange
rates in a Forex trade.

17. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
For the majority of currencies a
pip is equal to 0.0001 or a
hundred of a percent of the
currency unit.

18. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
The fact of the matter is that often
times the exchange rate of one
currency to the next only changes
by a few pips or so at a time and
by maybe a few dozen pips a
day.

19. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
A trader could have a profitable
Forex strategy and come out on
the winning side of virtually every
trade and still make very little
money.

20. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Why use leverage in Forex
trading? Traders do this to make
a profit on all of their hard work.

21. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
With 100 to 1 leverage a trader
can trade $100,000 using only
$1,000 of his own money.

22. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
The downside risk is a margin
call if a trade goes badly.

23. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
This is where trading stops come
into play.

24. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Trading Stops

25. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
DailyFX discusses how to set
stops.

26. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Stops are critical for a multitude
of reasons but it can really be
boiled down to one simplistic
cause: You will never be able to
tell the future.

27. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Regardless of how strong the
setup might be, or how much
information might be pointing in
the same direction

28. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
future prices are unknown to the
market, and each trade is a risk.

29. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Money management can be the
key to successful Forex trading,
more so that picking trades or
use of leverage.

30. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
A basic and safe rule of thumb is
to set stops 50 pips above and
below the trade.

31. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
This limits losses to $5 on a USD
trade.

32. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
As a trade progresses the trader
can raise his stops, both buy and
sell, as the trade becomes more
profitable and he can always exit
before hitting the sell stop.

33. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
The aim is to have at risk to
reward ratio that leaves you at
the worst with no profit or loss
and on good days provides a
profit.

34. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
Of course if you pick the right
trade on the dollar and it goes up
a tenth of a percent you will see a
profit of $10,000 on that $1,000
you are trading at 100 to 1.

35. http://www.forexconspiracyreport.com/why-use-leverage-in-forex-
trading/
That is why you use leverage in
Forex trading.