Discussion of Forex Trading and Currency Trading

Understanding leverage in Forex trading?

Let’s say I have $1K balance and my broker offers 100:1 leverage so that my buying power is $100K. I buy the Yen for $100K because I predict that Yen will rise in a week or so but I also predict that it will initially fall for like a day or two. So when the Yen falls in the first 2 days, my equity - as I understand it - will be negative. Will the broker close my position if they see that my equity is negative OR can I have this position open for as long as I like and hope for Yen to rise some day?

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2 Responses to “Understanding leverage in Forex trading?”

  1. Sachidhanandam Says:
    September 29th, 2009 at 8:55 am
  2. The Bolgspot one is great……………………. check out http://www.youtube.com/user/ForexTradingTV too

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