Exness Leverage: Understanding and Applying it
Learn what leverage in Exness is and how to apply it to your trading activities.
23.04.2024
A bit about Leverage in Exness
Leverage is intended for traders as a type of tool used to manage large finances in trading with limited finances. This tool that can allow users to increase potential profits, but also this tool can lead to increased risks. Exness provides its users with a variety of leverage sizes, and the most popular sizes start from 1:2 and up to 1:2000 for any account - but the sizes are not limited as Exness provides advanced features such as 1:unlimited. The leverage size gives users the ability to use a minimum deposit can make trades that can exceed the size of their initial deposit.
Important! Always consider the risks of using a high level of leverage. Use leverage wisely - analyze your experience, your trading plan and take into account the level of risk!
Exness allows traders to change the leverage level at any time (you can learn how to change the leverage level) taking into account their goals in the trading plan and trader's needs.
What is leverage for in trading?
Leverage is used by their traders as a vehicle to maximize their own trading exposure and manage their investments. The following information provides insight into the reasons why the traders using a leverage in its trading
Increasing Trading Potential
As described above, leverage gives traders the ability to manage a wider value of one's equity across the board depending on what they are using as margin. For illustration, with 1:200 leverage, a trader may use positional positions in a trade worth more than $200,000. This gives traders the chance to maximize their profit with even minor changes in the market compared to if the trader were to use just his or or her own resources.
Leverage in Trading
Leverage begins the moment a trader starts a session, at which point a portion of their balance (also known as the margin) is frozen as a collateral for the sector that the trader has opened. It is essential to realize that what amount is frozen is directly related to the level of leverage. To better see how this is related: The tighter the leverage, the bigger the balance that is used to take the position, and vice versa.
The Exness platform allows traders to choose the leverage for their operations based on their trading plan and risk management. Leverage allows you to utilize your capital more efficiently but with an increased risk of loss, so it is recommended to be careful with your trading activities and use stop loss orders to reduce the probability of loss.
The Exness platform allows traders to choose the leverage for their operations based on their trading plan and risk management. Leverage allows you to utilize your capital more efficiently but with an increased risk of loss, so it is recommended to be careful with your trading activities and use stop loss orders to reduce the probability of loss.
What are the Leverage requirements for exness
Advantages and Risks of Leverage in Exness
Since leverage has both advantages and certain risks that are not widely publicized, below we will describe the main advantages and disadvantages that traders should consider.
Advantages
- The popularity of the Leverage and its key benefit is the fact that the right way of using leverage makes it possible to amplify the gains from successfully executed trades. Even if a trader used leverage when the price changes by a minimum number of pips in the necessary trend, it may magnify the outcome of the trade.
- Traders with limited equity may utilize leverage to trade large volumes.
- By using leverage, a trader can vary his trading, such as applying standard or aggressive plans.
Disadvantages and risks
- The main disadvantage highlighted by traders is that using leverage might widen damages. Economic related market motions can lead to losses that are prorated in proportion to the level of leverage being utilized.
- Many novice traders take leverage lightly, resulting in high-risk trades that can be negatively affected by poor risk management.
Skilled traders advise to use leverage and minimize risks:
- 1. Use a stop loss to steer clear of potential losing trades
- 2. Apply standard levels of leverage, especially if you are just starting your trading career.
- 3. Only utilize amounts in trading that do not have a significant impact on the trader's equity
- 4. Follow the various methods and advice of skilled traders
Many users recommend starting with lower leverage to understand how their trading plan works and the results.
How to Use Leverage Properly
Applying leveraged trading ideas and plans requires a certain level of responsibility, some guidelines for building the right attitude towards leverage:
- As repeated many times above, before choosing a leverage level, assess your risk tolerance. If you have doubts, try using lower variations.
- Get into the habit of using a Stop Loss on every trade, which will become a habit and it will be a kind of insurance to reduce potential losses. Even if you are confident in your experience, market movements can be unpredictable.
- Use a plan that fits your strategy with a clear risk/probability ratio. It does not make sense to risk capital for a small potential profit.
- If you are inexperienced, use lower leverage to understand all its possibilities without risking more capital, and use lower low levels especially during periods of high volatility
Explore all the possibilities of leverage and try it at lower levels to get your first experience.
How to Choose Leverage Level in Exness
When trading Forex, you need to create a trading plan that will meet all the basic needs of a trader, as well as match the level of risk that can be involved in using higher leverage levels.
Before you start trading, set your leverage to 1:30 or 1:40 and try it out, it will give you more confidence in the market. You can always change the leverage size.
In case you are at the beginning stage and have just started using a live account, try lower levels starting from 1:2 and up to 1:20. This is a good point to start your activity.
For traders who are considered professionals, who have been trading for more than a month and have an idea of the risks and have experience in controlling them - they can use higher leverage. But even they should pay attention to the fact that the use of high levels requires caution.
Choosing the right level of leverage at Exness depends on many factors, including your experience, trading strategy and willingness to accept a level of risk.
Before you start trading, set your leverage to 1:30 or 1:40 and try it out, it will give you more confidence in the market. You can always change the leverage size.
In case you are at the beginning stage and have just started using a live account, try lower levels starting from 1:2 and up to 1:20. This is a good point to start your activity.
For traders who are considered professionals, who have been trading for more than a month and have an idea of the risks and have experience in controlling them - they can use higher leverage. But even they should pay attention to the fact that the use of high levels requires caution.
Choosing the right level of leverage at Exness depends on many factors, including your experience, trading strategy and willingness to accept a level of risk.
Exness Margin Requirements
In this section we touched on the topic of margin requirements for using leverage, let's take a look at some of the basics of what they are.
Margin requirements (or margin) in today's trading culture stands for the level of deposit used to keep items active and is an influential factor in managing all of the risks involved in leveraging. Exness uses margin to ensure that traders control their positions as efficiently as possible to avoid liquidating positions early due to insufficient equity in the individual trader's account.
Margin calls are subject to variation between instruments, trade size, and leverage.
A major feature of the Exness platform is the extensive details on margins for each specific account category and instrument. You can read a longer post about margin calls right here.
Margin calls are subject to variation between instruments, trade size, and leverage.
A major feature of the Exness platform is the extensive details on margins for each specific account category and instrument. You can read a longer post about margin calls right here.
Frequently Asked Questions (FAQ)
How do leverage impacts on trading?
The leverage expands trading capability as it allows you to handle a large amount of assets with a relatively small deposit. It does, in turn, increase our risk, as the prospective losing side can exceed the total size of the initial deposit.
How is the margin calculated?
Margin is calculated as a ratio from the full cost of the line item in dependence on the chosen leverage. As an instance, for a leverage of 1:100, the margin will equaled to 1% of the full size of your situation.
How do I change the leverage on an existing account?
To change the leverage on an existing Exness account, a trader needs to log in to his personal cabinet, select the appropriate account and change the leverage level in the settings section. It is important to take into account that changing the lease leverage will have impact on margin needs & exposure risk ratio.