Choosing a high Leverage Forex: is that a good idea?

Is it a good idea to choose a Forex broker with a high leverage?

Choosing a Forex broker can be a daunting experience. How do I know what will I need in the future? How do I make sure it offers the tools I need as a beginner but also those that will lead to success?

A good idea is to start choosing one of the many high leverage forex brokers. Beginner traders may not be interested in using leverage just yet, but once they have more experience and an understanding of how the market works, it’s something they will appreciate.

What is leverage in Forex?

When it comes to Forex, there is a very common term: leverage. But, what is this exactly? And, why is it important?

Leverage is the words designing the money that the broker lends the trader to maximize their trading deals to levels that otherwise couldn’t be reached.

This is important because the Forex market requires high investments to make a significant profit. Remember that we are talking about pips, which are equivalent to 0.0001. The higher the investment, the higher the profit. 

In order to be able to apply and use leverage, traders must have some money in their account destined to work as a deposit for the money they are borrowing. This is what we call margin.

Margin is usually expressed in ratios, like 100:1 or 50:1, meaning that for every dollar traders can get 100 or 50 times that money. Basically, you can invest 100.000 dollars while having only 1000.

We are due to mention that while leverage increases the chances of getting a more decent profit, also maximizes the innate risk that comes with all trading operations.

Leverage requires knowledge and experience, as well as a detailed plan and some extra steps to reduce the risk or at least keep it under control. 

Why a high-leverage Forex broker can help you?

There are several advantages that leverage brings to the game. The most obvious one is that allows traders to operate with higher amounts of money that will, eventually, leave them with a more consistent profit. When we talk about decimals, it makes a huge difference to invest 1000 or 100.000.

Leverage can be the best choice for traders working on earning experience and learning how the market reacts. The Forex market is the largest and most volatile, which means the currencies are constantly fluctuating. Traders should only opt for leverage when there is a strong chance to make a profit. 

Best high leverage Forex brokers

How much leverage you have access to, will depend on your broker. 

This is why it’s important to choose the perfect broker for you that in the future will help you become a successful Forex trader, even if from start you may avoid using leverage. 

While leverage is not necessarily a tool designed for investors just starting to trade in Forex, it’s a tool that you may be used in the future, therefore choosing a high leverage broker may be a good investment. A well-known Forex broker that has ranked first in the US for years, offers some of the highest leverage available, up to 500:1. But that is not all, it offers also a great service, a wide variety of currency pairs, and the fastest execution. 

HYCM. This broker offers up to 500:1 leverage (availability subject to the residence of the traders, so not really available in the US). The broker has proven to be reliable and trustworthy, and while it comes with higher initial deposits, they make it worth your while.

AvaTrade. Another Forex broker with several regulations all around the world. AvaTrade has proven to be one of the favorite Forex brokers and also offers high leverage options, up to 400:1.

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