One of the key aspects of Forex trading is the ability to trade using "leverage". It determines the required margin and amount of funds traders need to have in their trading accounts in order to take a position. Put simply, leverage allows you to take a position of much higher value than the monies deposited in your trading account so in other terms, a higher leverage means a lower margin requirement to place a trade.
How does leverage work?
You have a trading account with GO Markets with a balance of £10,000. If you have a trading leverage of 100:1 and wish to use £1,000 on one single transaction as the margin, then you will have an exposure of £100,000 in your base currency (£1,000) = 100 x £1,000 = £100,000 (trade value). The concept here is that GO Markets have temporarily given you the necessary credit to make the transaction you are interested in making. Without this margin, you would only be able to buy or sell transactions of £1,000 at a time.
Therefore, the leverage facility allows you to potentially make large profits from a relatively small initial investment.
It is imperative to understand the risks involved in trading Forex using high leverage and traders must find the appropriate level that suits their trading style as the effect of leverage is that both gains and losses are magnified.
Many Forex traders use Expert Advisors ("EAs") to trade on MetaTrader 4, and popular EAs often include money management tools designed to place the correct trade volume based on the size of the account. However, not all EAs feature these tools so it important that traders manually supervise the trading activities on their accounts and make any margin payments as they become due.
Increased leverage carries a greater risk and the potential to make significant losses on very small movements in the Forex market.
Our GO Markets' MetaTrader 4 platform has been designed to effectively monitor and allow you to control risk exposure. Based on each client's margin requirement, the platform will calculate both the funds needed to retain your current open positions and the funds required to enter into new positions. However, as stated above, it is your own responsibility, not GO Markets’, to continually monitor your positions. If the equity in your trading account falls below the margin requirement, a 'margin call' will happen, and we may close all your open positions to limit your risk to usable margins.
By default, all trading accounts are set up with a leverage rate of 100:1 (1%).
Depending on account equity, your account may be eligible for a leverage increase to a maximum of 300:1. You may also choose a rate lower than 100:1 (down to 1:1).
Before applying to change the leverage on your account, it is important that you have a solid understanding of the concept of leverage and how it will impact your trading. You should also carefully consider which rate is appropriate for you.
PLEASE NOTE: Certain currencies attract a higher margin rate irrespective of your account leverage. Some currencies may have a fixed leverage rate, while others (such as exotic currencies) may require up to five (5) times the margin of a major currency.
|Avaliable Leverage||Account Equity|
|300:1||USD < $5000|
|200:1||USD < $5000|
|100:1||USD > $5000|
Complete the form below to request a change to your GO Markets’ trading account leverage ratio, remembering to include your account number and your preferred leverage. Please note that leverage request changes are dependent on account equity and are not guaranteed. Refer to the available leverage table above.
* denotes required field
(*) All GO Markets' trading accounts are set up with the standard leverage of 100:1.
By submitting this leverage change request form, you acknowledge that you understand and are aware that increased leverage carries a high amount of risk to your capital and there is a potential you could sustain a loss greater than, and not limited to, the margin you have deposited with us. You also confirm you understand that an increase in trade leverage can result in severe or total account loss. GO Markets offers execution only services and will not provide you with financial advice. Please ensure that you fully understand the risks involved and seek independent advice if necessary. You are at risk of losing your money rapidly due to leverage. Margin Forex is high risk and leverage should be used wisely.
Please note the minimum and maximum account balance required at the various leverage bands. You need to keep in mind that if your trading account balance moves into a new leverage band, your leverage will be changed according to the new leverage bands - we will notify you of this. GO Markets reserves the right to change your leverage at any time at our discretion, with or without notice, and close all open positions if the equity in your trading account falls below the margin required to maintain your open positions.
Practice trading for 30 days on our free demo account, or open a live account.
Losses can exceed deposits.
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