Leverage enables traders to manage big position sizes with little investment.
SwissCapitalFX allows you to set your own trading limits with the freedom to choose leverage ratio from 1:1 to 1:500, depending on your trading goals and exposure needed.
In Forex trading, price movements are always measured in pips, which are the smallest conversion in currency rate, found in the second to fourth fraction place of the rate depending on the currency instrument.
When, for example, a currency pair like USD/CAD has an increased rate from 1.3450 to 1.3550, then there is a price movement of 100 pips.
If an investor seeks to trade with large amounts like $30,000, while having 100 pips movement, he can really make good profit by using high leverage ratio to gain exposure.
Margin is the minimal amount held by the broker when placing a trading order.
The notion of margin is at times confused with a cost that a trader owes to the broker.
However, in fact, it is a minimal amount held by the broker when placing a trading order, to ensure that the available balance of the trading account is adequate to the size of the opened position. The level of margin that is needed always depends on the position size and the instrument that is traded.