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Leverage and spread both play a


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Leverage and spread both play a vital role in gaining more. Leverage is a loan and the spread is the main difference between the ASK price and the BID price. The spread is the commission taken by the broker. There are many brokers all over the world accustomed to taking high commissions from their traders and providing low leverage for which traders can not operate with large lots that minimize profits. AAFX offers a low spread and a high flexible linkage as more than 1: 2000.

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Leverage and spread is two most important financial trading tools which we consider while choosing our trading broker because they support to make good money in a short time of span. In my small trading career I just trade with Forex4you trading broker because they are regulated and trusted. From this reliable broker I get- lowest trading spread from 0 pips and flexible high leverage that is 1:1000. And these help me to make high profit.

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How to calculate Forex Leverage

In simple terms, leverage is the ability to be in control of a huge sum of money without spending too much money yourself and borrowing the rest instead.

For instance, a leverage ratio of 100:1 means that you, as a trader can trade up to $10,000 worth of currency by making a deposit of $100. This is on a higher side but you get the point, right? Most brokers allow only up to a 50:1 ratio to limit risk.

This concept is huge in the forex market and is utilized by both companies and investors. Investors use leverage to increase their returns on investment by making profits on fluctuations in exchange rates of two different currencies.  Likewise, companies use it to finance their assets so that instead of utilizing stock to get capital, they maximize on debt financing in order to increase the value of their shares.

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On 2/8/2019 at 3:11 AM, uncle gober said:

the use of good and right leverage will indeed be very necessary so that traders can get better and be more maximal in running better trading activities than before.

It is true that leverage can be very helpful, but we should be careful the way we go about it's usage. As this can cause big loss for us if anything goes wrong.

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On 2/21/2019 at 8:29 AM, uncle gober said:

Leverage usage must indeed be able to be considered properly, this is needed so that traders can be more maximal in carrying out trading activities and can be better at surviving when on a real account.

New traders especially being unaware of the market conditions should keep the leverage low because high leverage causes higher damages too.

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  • 3 weeks later...

I think that new traders should keep low leverage in case that they would like to use it. I am always saying to all newbies not to use lever at all until they get to know market better. It is simply because lever can drag them into increased loses and maybe some disappointments which is not good

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