The Forex Advantage - Leverage
A huge advantage to trading the Forex is leverage. The ratio of actual dollars invested to actual dollar value is called leverage. Using $1000 to buy a Forex contract with 100,000 value is a leverage ratio of 1:100. All you invest is 1000 and you control 100,000 of value. The reward is great and the risk is limited. Risk is controlled by how much you invest. If you trade 1000.00, that is the most you can ever loose on that trade. Forex does not have margin calls. Never trade more than you can afford to loose. Money management principles are the key to success in the Forex as they are in any trading market.