Leverage Rules

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Our flexible leverage system assists traders in maximizing their profit and minimizing their risk.

The leverage range depends upon the type of trading accounts and the volume of funds in the account.

At Skylark FX , the amount of leverage ranges from 1:1 to 1:400 on trading in the forex market. Higher the amount of funds higher would be the margin requirements.

It is due to the increasing cost of hedging in the open orders. With an increase in the margin requirements, the leverage also changes and increases.

At Skylark FX , there are no restrictions on trading strategies. With our flexible leverage system, a trader enjoys complete freedom in choosing trading strategies depending on their deposit size.

Leverage Ratio and Minimum Margin Requirements

1. Leverage is the ratio that expresses the margin requirements imposed by the broker. It can be explained by an example, if a broker requires minimum margin as 2% in an account, a trader must maintain at least 2% of the total value of a current trade available as cash in the account, before you proceed.

2. Leverage ratio can be expressed as, 2% margin is equivalent to a 50:1 leverage ratio (1 divided by 50 = 0.02 or 2%). The relationship between leverage and minimum margin requirements can be understood as -

3. EAs a trader, it is important to understand both the benefits and the pitfalls, of trading with leverage.

4. Using a ratio of 50:1 as an example means that it is possible to enter into a trade for up to 50 dollars for every dollar in the account.

5. Margin-based trading can be a powerful tool – with as little as $1,000 of margin available in your account, you can trade up to $50,000 at 50:1 leverage.

6. It means that investing $1,000 to the trade; you have the potential to earn profits on the equivalent of a $50,000 trade. Of course, in addition to the earning potential of $50,000, you also face the risk of losing funds based on a $50,000 trade, and these losses can add up very quickly. Traders suffering a loss without sufficient margin remaining in their account run the risk of triggering a margin closeout.

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