Obviously, to get high earnings from Forex trading, you need to make big investments. But what if you do not have much free money? There is a technique that can help you. You can utilize leverage to scale up your investments. As a result, your rewards will grow as well. The higher the leverage, the bigger your earning opportunities.
In simplistic terms, leverage is an approach, which involves borrowing money from a broker to make a bigger investment in the currency pair, stock, or another asset chosen. As a result, if it turns out that your predictions are right, and its price will move in the direction favorable for you, your reward will be multiplied. Yet, as you probably guessed, if you lose, your loss will be multiplied as well. So, there is an increased risk involved.
Hence, this technique is a safe choice only if you know what risk management principles are and are sure that you will follow them. On the other hand, if you are new to trading, it is advisable to stick to low leverage and small investments (no more than 1% of your total capital) for as long as it will take you to understand how the market works and how to keep risks under control.
What leverage is the best? Certain high leverage brokers offer up to 1:2000. Still, if you are not ready to bear such extreme risks, it is better to stick to more comfortable margins. As for beginners, the optimal options for them are about 10:1 or 5:1 (no higher than 1:30, in any case).
One must also note that, in many countries, local authorities strive to protect inexperienced traders from unbearable losses and impose restrictions on the size of leverage. So, in the EU and the UK, beginners must stick to the limit of 30:1, in the USA ― 50:1 (for major currency pairs) and 20:1 (for exotic ones).
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Now, let us name the most trustworthy brokers that provide high leverage limits:
- RoboForex ― 1:2000;
- Exness ― 1:2000;
- InstaForex ― 1:1000;
- Forex4You ― 1:1000;
- FxPro ― 1:200;
- EvoTrade ― 1:200;
- eToro ― 1:30;
- XM Group ― 30:1 (the EU), 1:188 (other countries);
- ForexClub ― 1:100;
- LegacyFX ― 1:200;
- Tickmill ― 1:500;
- Libertex ― 1:500;
- Weltrade ― 1:1000;
- IC Markets ― 1:500;
- Admiral Markets UK ― 1:500;
- FXOpen ― 1:500;
- Interactive Brokers ― 1:500;
- Robinhood ― 1:100;
- Swissquote Bank ― 1:100;
- Capital.com ― 1:200.
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In sum, high leverage will come useful to advanced traders who want to maximize their earnings, however, to avoid extra risks, it is recommended to choose a platform from our top list. All the brokers we mentioned are properly regulated and act within the boundaries of the law and fair business practices.