Leverage trading, or trading on margin, means you aren't required to put up the full value of the position. Forex trading offers more leverage than stocks or futures - up to 200 times the value of your account. Of course, higher leverage magnifies both your gains and losses.
Margin Trading: Stocks vs Forex For stocks, you can borrow up to 50% on margin to buy that stock, but you pay your brokerage firm interest on the amount you borrow. The money you deposit in a forex account acts as collateral for your trades. This deposit, called margin, is typically 1% of the value of the position. More leverage means more opportunity - and more risk It's crucial to remember: increasing leverage increases risk. To limit downside risk, monitor your account regularly and use stop-loss orders on every open position.
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