Forex Recipe

Leverage means borrowing some amount for investing. In forex you can borrow the money from your broker. Leverage is quite high in forex trading with margin requirement. The margin-based leverage can be calculated dividing the total value of the transaction by the margin.

If you need to deposit, say, 1% of the transaction value as margin and you wish to trade one standard lot of USD/CHF, which is equivalent to $100,000, the margin would be $1,000. You are offered a leverage of 100:1 (100,000/1,000). (more…)