Can I Trade Without Leverage? - Can You Do Forex Trading Without Leverage?
In forex, one can trade without leverage by choosing the 1:1 leverage option for their trading account. Trading leverage of 1:1 means that the trader has not borrowed any capital from their broker & the trader will only use the money they have deposited in their account for trading.
This option of not leverage is not very popular because leverage is what makes the market popular among online traders - because with leverage trading option: for example 1:100 leverage option means one can borrow $100 dollars from their broker for each 1 dollar in their account, therefore a trader with a deposit of $1,000 can borrow up to $100,000 from broker - ($1,000*1:100 which is equal to $100,000). One then can use this borrowed capital to open trades with.
Also, if there was no leverage then the market would be inaccessible to many traders as they would require a lot of capital before they start online trading, but with leverage traders can deposit a small amount of capital & use leverage to borrow the rest of the capital required to open a trade from their broker.
Deposit a trader puts in their trading account is referred to as margin. This margin in trading account is the money that traders used when borrowing from their broker using leverage. If one has a margin of $1,000 in their account they will then use this $1,000 to obtain leverage from their broker and then open trades with capital that is borrowed from their broker.
To Learn More about Leverage and Margin - Read the Topics Below:
Leverage and Margin Discussed
