Forex Risk

[Iqbal]

I am new to frorex trading and have a question for the more experienced traders.

I understand forex trading carries a high ammount of leverage, and it is possible to trade with as little as 300 Pounds.

My question is with the high ammount of leverage available is it possible to lose more than your initial deposit and end up oweing your broker money?

 

[Rhody Trader]

I am new to frorex trading and have a question for the more experienced traders.

I understand forex trading carries a high ammount of leverage, and it is possible to trade with as little as 300 Pounds.

My question is with the high ammount of leverage available is it possible to lose more than your initial deposit and end up oweing your broker money?

Actually, if you trade through Oanda's FXTrade platform, you can trade with as little as 1 Pound.

To answer your question, for all practical purposes, is "no". Because of automated trade exiting if your margin falls below the defined cut-off, you cannot lose more than you deposit. The only possible exception might be in the case of a very, very dramatic move which takes place over the weekend.

 

[ptc]

yes, it is very possible.

 

[Blether]

I understand forex trading carries a high ammount of leverage, and it is possible to trade with as little as 300 Pounds.

My question is with the high ammount of leverage available is it possible to lose more than your initial deposit and end up oweing your broker money?

Rather than 'forex trading carries high leverage', let's say highly-leveraged forex trading is available.

For instance, I've been canvassed by telephone recently for leveraged forex trading with a 10x multiple., in a currency pair that will move 5% in a heartbeat, when it breaks. If I'm in at the beginning and it moves against me, that's a potential loss of 50% of my stake (5% x 10). 20x leverage would mean 100% risk on this size of break. You can work out how it looks with multiples in the 100's.

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