Leverage

Leverage is like we borrow money in a certain number of brokers to provide some assurance that is called the margin.
Leverage there are several types:

    1: 1 means that the guarantee money = contract amount (100%)
    1:50 means the money guarantee is 2% of the contract value
    1: 100 means the money guarantee is 1% of the contract value
    1: 200 means the money guarantee is 0:50% of the contract value
    1: 400 means the money guarantee is 0:25% of the contract value
    1: 500 means the money guarantee is 0:20% of the contract value


Collateral (margin)Collateral (margin) will be returned to the account balance of your portfolio after you order position is closed (close).
Margin CalculationFor Indirect Currency (USD / JPY, USD / CHF, USD / ...):Lot x 100,000 x% Margin.Example:

    Buy 0.3 lots of USD / JPY at the price of 121.07, with leverage of 1: 200
    = 0.3 x 100,000 x 0.5% = $ 150
For Currencies Direct (GBP / USD, EUR / USD, ... / USD):Lot x 100,000 x% Margin x Market PriceExample:

    Buy 2.1 lots of EUR / USD at the price of 1.3010, with the leverage of 1: 500
    = 2.1 x 100,000 x 0.2% x 1.3010 = $ 546.42
For Cross Currency Rate (GBP / JPY, EUR / GBP, and other currencies that are not proportionate to the USD):Margin for Cross Rate is calculated from the Base Currency (the currency in front)Example:

    (GBP / JPY) = Base Currencynya was GBP
    Buy 1.5 lots of GBP / JPY at the price of 242.65, with leverage of 1: 500 (eg, when the price of GBP / USD
    = 2.0360) = 1.5 x 100,000 x 0.2% x 2.0360 = $ 610.8
Use of Leverage and MarginLeverage 1: 500 and you want to buy $ 100,000 USD / JPY (the same one regular lot),You do not need to spend capital for $ 100,000 but you simply remove the capital guarantee that is only 0.2% of $ 100,000 is $ 200 only.And when you get a profit from the transaction, then the results can be as large as the actual capital of $ 100,000 without leverage. And if any loss, you also only loss of $ 200 and not $ 100,000.
You can also limit the losses with the use of Stop Loss.
Do not mistake the leverage and volume / lotLeverage does not affect the value of pipsLot / volume determines the value of each pips
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Forex dictionaries bag 1Labels: Dictionaries
TraderPerpetrator / players foreign exchange transactions
BrokerIntermediary foreign exchange transactions. Perpetrators traders always use the services of a broker. Examples broker MARKETIVA
CommodityCurrency pairs are harvested. Examples GBP / USD can be said is doing a transaction Sterling
OrderRequest transaction. There are 2 kinds of orders are orders to buy (buy) and order juall (sell).
Pips or pointThe smallest unit of currency movements. Example of the price of GBP / USD 1.9000 moving to GBP / USD 1.9050 it can be said USD rose 50 pips or price Sterling fell 50 pips.
Bid / AskCouple selling price. The bid is the price we are as a trader. Ask is the purchase price we as a trader. Examples GBP / USD 1.9000 / 05 means the Bid price Ask price 1.9000 and 1.9005. If we buy USD, then we charged the price of 1.9005. If we sell the USD then charged the price of 1.9000.
SpreadThe difference between the selling price and the purchase price. GBP / USD 1.9000 / 5 means the difference between the selling price and the purchase price for the USD by 5 pips.
LotUnit number or volume of commodity exchange. Usually 1 lot has 100,000 USD price. Example 0.1 lot.
AccountsTrader ID or Account Trader
MarginGuarantee funds that should be provided in order to carry out foreign exchange transactions.
DepositThe amount of funds deposited into the trader's account.
EquityThe amount of funds that are ready to be used as margin or collateral.