Trading platforms
The MetaTrader4 (MT4) platform, specialised in the Forex market, can facilitate advanced trading, which includes dozens of technical analyses (analysis of price trends) and is fully compatible with trading robots.
MetaTrader 5 (MT5) allows you to perform technical trading operations and analysis on the forex markets with https://exnesslatam.com/cuenta-estandar/. MT5 was originally developed to give its traders access to stocks, futures and CFDs.
Incidentally, unlike the forex space, contracts for difference (CFD) trading does not involve buying or selling any underlying assets you may have.
What is Leverage Trading in Forex?
The basic principle of leverage in forex trading is that you can trade with a larger amount of cash than you currently have in your account. It is worth noting that this can accelerate your losses and win trades. The basic idea is that you can multiply your stake by a certain factor.
So imagine you have a balance of 1,000 USD - if you apply a leverage of 10x, you can trade with 10,000 USD.
To explain leverage a little more:
- Let's say you want to place an order on GBP / USD because you feel bullish on the British pound.
- The current price of the pair is 1.2623
- You have 500 USD in your forex trading account and then apply a leverage of 20x
- Your buy order is now worth 10,000 USD (500 x 20 USD).
- Let's say a few hours later the price of GBP / USD has increased by 2%. As a result, you decide to lock in your profits and exit the position.
- Under normal circumstances, 2% on a share of 500 USD would result in profits of 10 USD.
- However, since leverage of 20x was applied to your trade, this means that you really earned 200 USD (10.00 USD x 20 USD).
The importance of real brokerage reviews
As a newbie, you need to be extra careful when it comes to the platform you trade with as it can come with unpredictable risks.
A crucial part of choosing a broker is to do thorough research before making your decision.
One way to do this is to read reviews on the broker platform to give you an insight into other traders' experiences with the brokerage site in question. You can also check out broker reviews like ours, which are unbiased and based on research from experts. More on this later.
Legislation and regulation
A good place to start is to check that the broker you are considering has a legal mandate to take on UK traders. It is mandatory for brokers based in the UK to hold an FCA (Financial Conduct Authority) trading licence.
If the broker is licensed by the FCA, you can be sure that the platform conducts its business in accordance with UK and EU laws.
With this in mind, there are a number of non-FCA forex brokers operating in this space that also offer various protections and regulatory safeguards. This is because they choose to be licensed by other top tier bodies such as CySEC (Cyprus) and ASIC (Australia).
- SHARE
