Introduction
Leverage is a powerful tool that can be used to magnify trading profits, but it can also amplify losses. As a result, it is important to understand the maximum leverage that is available to you before you start trading.
FXDD's Maximum Leverage
The maximum leverage that is available to FXDD clients depends on their account type and regulatory jurisdiction.
Retail clients:
FSC-regulated: The maximum leverage for retail clients regulated by the Financial Services Commission (FSC) of Mauritius is 1:30.
MFSA-regulated: The maximum leverage for retail clients regulated by the Malta Financial Services Authority (MFSA) is 1:30.
Professional clients:
FSC-regulated: Professional clients regulated by the FSC can apply for leverage of up to 1:500.
MFSA-regulated: Professional clients regulated by the MFSA can apply for leverage of up to 1:100.
Factors to Consider When Choosing Leverage
When choosing the amount of leverage to use, it is important to consider your risk tolerance and trading experience. If you are a novice trader, it is generally recommended that you start with a lower leverage level, such as 1:10 or 1:5. This will help you to limit your potential losses.
Here is a table summarizing the maximum leverage available to FXDD clients:
| Account Type | Regulatory Jurisdiction | Maximum Leverage |
|---|---|---|
| Retail | FSC | 1:30 |
| Retail | MFSA | 1:30 |
| Professional | FSC | 1:500 |
| Professional | MFSA | 1:100 |
Please note that these are the maximum leverage levels that are available. FXDD may require you to deposit more money or meet other requirements in order to qualify for higher leverage levels.
Risks of Using Leverage
It is important to remember that leverage is a double-edged sword. It can magnify your profits, but it can also magnify your losses. If you use too much leverage, you could lose more money than you have in your account.
Here are some of the risks of using leverage:
Increased losses: If the market moves against you, you could lose more money than you have in your account. This could lead to a margin call, which is when your broker forces you to close your trades and sell assets to cover your losses.
Emotional trading: Leverage can make it easier to make emotional trading decisions. This is because you may feel like you have more money to trade with than you actually do.
Hidden costs: Some brokers charge fees for using leverage. These fees can eat into your profits and make it more difficult to be successful.
Conclusion
Leverage can be a useful tool for traders, but it is important to use it responsibly. If you are considering using leverage, make sure that you understand the risks involved and that you are comfortable with the potential for increased losses.
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