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Leverage and spreads


uncle gober

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Leverage and Spread is quite tied to each other, leverage is leveraging our position to higher level allow us to gain more with small power, while spread is the amount that we must bear based on our lot size and when we open a position, just say it is a comission or fees to broker who act as middle-man. Too high leverage or spread isn't good because will lead to overuse and also unfair trading.

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Leverage and spread is hands down two of the most important aspect for anyone in Forex, but the point or problem is, when we start taking it too seriously and look for brokers with favorable on these things then we will struggle. I always look for tight spread and decent leverage too, but my main focus is to get broker that I can trust and one such company is TICKMILL, it is class above the rest with having awesome low spreads from 0.0 pips, high leverage up to 1:500 plus much more!
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Yes gober, the most important part is that leverage should be use wisely, it is a good tools to help traders but at the same time destroy the traders. Spreads is just another comission you should pay, actually that is bigger in STP or DMA compared to ECN brokers, but what i want to emphasize here that actually it doesn't have any correlation to each other even still important to know.

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The Forex market is by all accounts extremely straightforward from the start. The greater part of the trading volume is exchanged a couple of currencies and currency pairs. The most significant currency pair is USD/EUR. In any case, the exchange rates themselves are determined through an assortment of components that eventually impact the organic market for a specific currency. If the interest for a currency increases, its prices will increase until organic market are back in balance. This procedure happens in the ultra-fluid Forex market consistently.

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The purpose of leverage in Forex trading is to ensure that our balance is not so high that we can purchase any currency or commodities in large quantities, but this facility guarantees the privacy of our broker in the form of privilege from which we can balance. Big lots can be made and spread is the difference between selling and bye price which is deductible with every order which is also known as broker commission ..

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Spread betting is a leveraged product. This means that you only need to deposit a small fraction of the overall value of any trade, known as margin. For example, if the margin requirement for a trade is 20% then you would need 20% of the full value of the trade in your account to open the position.

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