TRADE ON MARGIN

Individual Forex trading has become very popular during the last 10 years. The  development of financial services and trade on margin has contributed to the growing  Forex popularity. Under these circumstances, every person willing to trade the Forex market is able to trade Forex having some guaranteed amount of money in his or her account. In reality, if a person is willing to trade the Forex market, he or she has to have 100,000 units of some  currency in his or her account. Very often it is an overwhelming sum of money for most individual traders. However, thanks to the leverage provided by brokers, traders are able to execute operations with currencies having far less money in their accounts. What is leverage and how is it provided? As a rule, a broker provides leverage for his or her clients enabling individual traders to gain access to the Forex market. If a broker provides  ratio of 1:100 leverage (or 1%), it means that a trader is able to make transaction. For example, if a trader opens a position using $1,000 of his or her  account balance it means that in reality he or she can conduct a $100,000 transactions.