Forex Trading Leverage Explained
Can any of you explain for me about the meaning of “leverage trading” in forex trade? Thank you very much!?
leveraging is when you borrow money at a fixed interest rate and you then invest the borrowed money in the hope that your money grows faster then the interest rate on your borrowed money. if your investment does grow faster you can pay back the borrowed money and keep the profits you made off the investment. in other words you can make money from investing other peoples money. this could backfire because if your investment falters you still need to pay back the borrowed money. this is why the derivatives and the credit default swaps caused the housing market to fail. the derivatives are comprised of these high risk investments. foreign exchange leveraging is just leveraging used in the market for currency.
Forex leverage
