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What is Leveraged Trading?
Leveraged trading allows traders to operate larger volumes of assets using only a portion of their own capital by borrowing funds from a broker.
How Does It Work?
Typically, trading assets requires investment equal to their value. Leveraged trading enables control of larger positions with smaller capital. The amount of additional funds is determined by the leverage ratio, which can range from 1:10 to 1:100 or higher. For instance, with $100 and 1:100 leverage, a trader can control $10,000.
Margin in Leveraged Trading
Margin is the amount that a trader must deposit to open a leveraged position. It acts as collateral, allowing the trader to borrow additional funds. For example, a $1,000 position with 1:50 leverage requires 2% margin, or $20.
Advantages of Leveraged Trading
- Control Over Larger Positions: Traders can operate larger amounts than their own capital allows.
- Potentially High Profits: Successful leveraged trades can yield significant profits.
Risks of Leveraged Trading
- High Risks: Possibility of substantial losses exceeding the initial capital.
- Margin Requirements: Need to monitor margin levels to avoid automatic position closure.
Example of a Trade
A trader has 100 EUR and wants to buy dollars at an EUR/USD rate of 1.10. With 1:20 leverage, the trader can control 2,000 EUR or 2,200 USD. If the rate rises to 1.12, the profit would be 40 USD.
When to Start Leveraged Trading?
Leveraged trading is recommended for experienced traders who understand the risks and know how to manage capital. Beginners should start with smaller, less volatile markets, using margin and conducting thorough research.
Leveraged trading can be profitable but requires careful risk management and a deep understanding of leverage and margin mechanics.
Reviews about Quotex
07/08/2024
Interesting broker
At first I wasn’t sure that I wanted to collaborate with this particular platform. I'm used to there being several types of accounts and a large number of account settings. So to speak, there is room for maneuver. Only later did I understand that this is a real advantage - when there is only one account, with simple and understandable conditions, and you don’t have to rack your brains over what to choose. But the Quadcode Markets trading terminal is a completely different story. It is customizable a little more than completely. Hundreds of assets, dozens of indicators, built-in calendars and calculators, a lot of functions that I didn’t even know about (for example, NBP). At the moment I can say that I am comfortable at trading.
08/02/2024
It is possible to trade
Trading binary options at QUOTEX was convenient, although now the conditions have deteriorated a bit. Nevertheless, the broker continues to offer high quality services in this market. Their platform is great for binary options trading, although the QUOTEX mobile app is not as successful, but still a decent alternative to the main terminal.
08/26/2024
Not a bad company
I have been working with QUOTEX broker for quite a long time, about two years. But during this time I have realized that the company is not bad, you can and should trade with it. Transactions are made quickly and at the stated quotes, which is very important. Plus, the closing takes place at real quotes, which can also be observed at other brokers. I can recommend QUOTEX.
09/12/2024
A broker for calm and stable trading
I have heard about QUOTEX broker for a long time, but I started cooperation only a year ago. What attracted me first of all was the period of the company's work in the binary options market. Many brokers have collapsed, but QUOTEX continues to provide services. The conditions here are quite standard, I would not call this company any kind of super. Even the profitability of trades is average on the market. But it is possible to trade calmly and steadily with QUOTEX.
10/05/2024
My experience
I would like to write some positive thoughts from my experience with this company. QUOTEX gives me good trading conditions. I trade actively, and fast order execution is important to me. Here orders are processed quickly, closing orders is also good. Sometimes the terminal slows down, I don't know, maybe it depends on the speed of the Internet, but it interferes with the work.