Leverage is a common instrument used by Forex traders from all walks of life. The main principle behind a leveraged position is that with a minimal initial outlay of money, the individual can proportionally leverage a much larger sum.
Of course, the positive benefit here is that should he or she be in a winning position, the amount of profit to be enjoyed is much larger. However, there is also a downside to this strategy.
Should the trader be in an “out-of-pocket” position at the close of the trade, an immensely negative balance will be the end result. It is for this reason that only experienced Forex investors should use this tool; there is a substantial amount of risk involved. Let us now look at some of the leverages which are offered by a selection of the most reputable online brokers.
XM.com – 1:888 Leverage
One of the first benefits of XM.com is the fact that the trader can enjoy leverages that are as high as 1:888. This figure is applicable to Forex positions as well as gold and silver trades.
Leverages of 1:100 are available for CFDs and oil. Besides providing handsome leverages to their clients, the company boasts a solid reputation that can be traced back to 2009. There are four different accounts available and Islamic trading is welcomed.
XM.com also hosts the useful Meta Trader 4 platform; one of the most transparent and functional which is currently available within the online Forex market. Also, it should be noted that spreads between 1 and 1.8 pips provide even further levels of accuracy. This is quite important when working with wide leverages. Other benefits of this portal include one-touch and automated trades, mobile access, pending orders and trailing stops.
Plus500 – 1:200 Leverage
Plus500 is a CFD service provider that was founded in 2008 and has offices in both the United Kingdom and Cyprus. They are regulated by the Financial Conduct Authority in the UK as well as CySEC in Cyprus. This is important to keep in mind from a security and a reliability point of view.
Plus500 provides leverages of 1:200 and considering that a “mini” account can be opened for only $20 dollars, this platform is seen as being ideal for moderate to conservative traders. Currently, the website utilises its own proprietary software to execute trades as opposed to the Meta Trader 4 system. The platform is highly regarding for its simplicity and user friendly interface. Plus500 also provide an impressive number of currency pairs, 51. Their help system is also flexible; offering email, telephone and offices that traders can physically visit if they are in the area.
Plus500 is targeted toward experienced traders and not entry level beginners, they are also not open to traders from the United States. Of particular interest to some individuals is the fact that Plus500 accommodates PayPal payments alongside money orders, Skrill and credit cards.
eToro – 1:400 Leverage
For those who are located within the United States, this broker is one of the most popular. eToro boasts leverages as high as 1:400 on all currency pairs.
Other instruments such as indices and soft commodities are leveraged at 1:50. This system is also seen as being able to provide a number of amenities to the client. There are four different account types to choose from. A live chat widget is available alongside standard telephone support and dedicated email. Free educational tools are also a nice bonus; these are ideal for those who are just beginning to learn about the Forex and CFD markets.
Islamic accounts can be opened and trading contests round out the functionality of eToro. For those who open a VIP account, several additional benefits are likewise possible. These include (but are not limited to) fast withdrawal times of three days, a fifteen per cent deposit bonus for amounts up to $2,000 dollars and free access to trading chat rooms.
FXGlory – 1:3000 Leverage
FXGlory is a well-known platform for several reasons. First and foremost, leverages of an incredible 1:3000 are available on currency pairs. As mentioned previously, these can be extremely lucrative or quite dangerous. Such levels should only be chosen by those with a great deal of experience in the markets.
As with eToro, United States traders are welcome as are Islamic accounts. Fixed spreads of approximately two pips are considered to be appealing and as FXGlory is completely based within the browser, there is no need for any downloads to take place. This can be a massive advantage for those who have limited hard disk space available. Meta Trader 4 is available as one of their platforms alongside WebTrader. Scalping and the use of expert adviser software is welcome and a minimum deposit of only one dollar is required to open a basic trading account. A few other benefits not to be overlooked are one-click and automated trading, mobile access, hedging and trailing stops.
Alpari – 1:500 Leverage
One of the first things to mention in regards to Alpari is that this broker has been online and operational since 1998. Thus, it is one of the oldest and most trusted platforms in existence.
Leverages of 1:500 are available for Forex positions. 61 different currency pairs are likewise offered. The primary trading platform is once again Meta Trader 4 and four different types of accounts are available. The minimum deposit required is one dollar for an entry-level position. Alpari is regulated by no less than five different organisations (depending upon where one is located). Traders from the United States can access Alpari and Islamic accounts are possible. A few other benefits include telephone trading, segregated accounts and free educational materials.
These are a handful of the top brokers which offer different types of leverages. The primary reason to examine each is that certain trading systems will require very specific amounts of leverage. By appreciating what each platform has to offer, it is much easier to make a correct and informed decision. Leveraging can be a risky method and should only be done once one has gained a thorough understanding of the basic principles.
Disclaimer: These brokerage services are for experienced traders only. Your capital may be at risk