For example, you might think the Euro (EUR) is going to increase in value against the Australian dollar (AUD) so you could place a trade to buy the EUR/AUD currency pair. If the Euro rises you would make a profit; if it drops you would incur a loss. Conversely, if you thought the Euro was going to decrease in value you could place a trade that would benefit from that price movement.
The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments by using various instruments that include options, futures and margin accounts. Companies can use leverage to finance their assets. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value.
Finally, it is important to note that in leveraged forex trading, margin privileges are extended to traders in good faith as a way to facilitate more efficient trading of currencies. As such, it is essential that traders maintain at least the minimum margin requirements for all open positions at all times in order to avoid any unexpected liquidation of trading positions.
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosure. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. *Increasing leverage increases risk.
Our Interactive plot offers you indicators to detect patterns on Japanese Candlesticks (see the list of Candlestick Patterns below). It’s a recommended tool for those traders that use Candlesticks to take trading decisions. This tool is very useful to get an immediate notification being displayed as soon as the pattern occurs. The Japanese candlestick theory establishes a series of patterns which are statistically previous to potential change or interruption of trends, a turning point in a current trend, etc.
Please support this idea with LIKE if you find it useful. Initiate Long. Entry - 1.03340 TP1 - 1.13378 TP2 - 1.20148 TP3 - 1.26684 SL - 1.00072 Reason: Despite I provide a Long position here, we should be ready to both breakouts, because of Triangles are not bullish/bearish patterns. First scenario is shown on the Chart in case the Resistance broken position...
My details: (1) Entry @ 0.68310 (Sell Limit) (2) Stop loss @ 0.68370 (6 pips) (3) Target @ 0.68190 (18 pips) - Closing 90% - S/L @ break-even (4) R:R = 1:3 min. Stay tuned for the updates Follow and leave a like if you liked this idea and want to see more! *DISCLAIMER* This post is solely for educational purposes and does not constitute any form of investment...
If you're feeling inspired to start trading, or this article has provided some extra insight to your existing trading knowledge, you may be pleased to know that Admiral Markets provides the ability to trade with Forex and CFDs on up to 80+ currencies, with the latest market updates and technical analysis provided for FREE! Click the banner below to open your live account today!
To illustrate further, let's look at a typical USD/CAD (US dollar against Canadian dollar) trade. To buy or sell a 100,000 of USD/CAD without leverage would require the trader to put up $100,000 in account funds, the full value of the position. But with 50:1 leverage (or 2% margin required), for example, only $2,000 of the trader's funds would be required to open and maintain that $100,000 USD/CAD position.
Currencies are traded on the Foreign Exchange market, also known as Forex. This is a decentralized market that spans the globe and is considered the largest by trading volume and the most liquid worldwide. Exchange rates fluctuate continuously due to the ever changing market forces of supply and demand. Forex traders buy a currency pair if they think the exchange rate will rise and sell it if they think the opposite will happen. The Forex market remains open around the world for 24 hours a day with the exception of weekends.