What Is The Best Leverage Ratio for Forex Beginners

The term leverage has been and continues to be quite commonly applied within the Forex market, where it has notably influenced the investor's choices in the decision making process of picking a fitting FX broker to work with.

However, if you are a newbie trader, you may find it hard to understand it and choose the best Forex leverage for yourself. In this article, we would like to offer an experienced point of view to help you make informed decisions and choose the best leverage for Forex trading.

Why Leverage Is Important for Forex Beginners

Leverage can be defined as the power of levering your account balance. In other words, the power of borrowing. Obviously in Forex, the broker gives you the loan to place a trade. It allows you to manage a big volume with a very small volume in lieu.

Leverage is, without a doubt, one of the main attractions of the Forex market. Traders with a modest amount of margin can get meaningful exposure to a number of financial markets. Here are some benefits of using leverage in forex trading.

1. Leverage offers opportunity to trade with low capital

one of the advantages of leveraged trading is that it provides you with access to additional funds because you are borrowing money from the broker to gain more exposure to the market than you otherwise would. You can start trading with low capital and has the opportunity to gain a huge return if you can place the right trades.

2. Leverage Is Interest-Free

Despite the fact that you get this funds from a Forex broker, the loan doesn’t incur any interest. If you want to start trading you can get the loan with less fear for aren’t expected to pay any interest.

3. Convenience

In a highly competitive environment, Forex brokers provide an opportunity to choose leverage on favorable terms at low interest rates a flexible tariff schedule, and minimal commissions. Often reputable brokers even offer the personal manager services. A personal manager will help you understand all the nuances, choose the optimal leverage and balance your trading strategy.

What IS The Best Leverage for Beginners

Forex leverage is usually calculated in fixed amounts which vary between brokers. Brokers leverage traders as per their riles and regulations. Forex leverage amounts are usually given as ratios, typically 10:1, 50:1, 100:1, 200:1, 400:1, and 500:1.

When you choose the leverage for your Forex trading account, you need to consider how much balance will you deposit, what is your risk to reward ratio and how many positions will you allow yourself to open at a time.

The following few safety precautions used by experienced traders may prove useful in diminishing the risks of leveraged Forex trading:

1. Keep the leverage as low as possible

If you are a cautious or an inexperienced investor or trader, use a lower level of leverage that you feel comfortable with, instead of trying to mimic the professional players choice of higher leverage.

2. Use protective stops

You need to place stop-loss and break-even in every trade you take. In order to protect your capital and also your account, limit stops is a must. You can always enter another trade if you have the capital. That’s why you need to manage the risk accordingly.

3. Don’t make the situation even worse

 Don’t attempt to turn around a losing position by adding more money and averaging down on it. It defies logic to stick to a losing position and risk more and more of your trading capital, hoping for a miracle turnaround.

List of Forex Brokers with Highest Leverage

There are vast numbers of Forex brokers around the different corners of the world, and therefore there is need for stand out features and some Forex Brokers offer high leverage to stand out from the competition. Find a list of Forex brokerage companies offering the highest leverage in the table below.

Broker	Detail	More Information
	Founded: 2009 Headquarters: Russia Min deposit: 1 USD Max Lev: 1 : 3000	FBS Review
	Founded: 2008 Headquarters: Limassol, Cyprus Min deposit: 1 USD Max Lev: 1 : 2000	Exness Review
	Founded: 2009 Headquarters: Belize Min deposit: 10 USD Max Lev: 1 : 2000	RoboForex Review
	Founded: 2017 Headquarters: United Kingdom Min deposit: 50 USD Max Lev: 1 : 2000	ZFX Review
	Founded: 2011 Headquarters: Limassol, Cyprus Min deposit: 10 USD Max Lev: 1 : 2000	FXTM Review
	Founded: 2007 Headquarters: Moscow, Russia Min deposit: 1 USD Max Lev: 1 : 1000	InstaForex Review
	Founded: 1998 Headquarters: Mauritius Min deposit: 5 USD Max Lev: 1 : 1000	Alpari Review
	Founded: 1997 Headquarters: Serbia,Montenegro Min deposit: 10 USD Max Lev: 1 : 1000	Libertex Review
	Founded: 2005 Headquarters: United Kingdom Min deposit: 500 USD Max Lev: 1 : 1000	CPT MARKETS Review
	Founded: 2018 Headquarters: Melbourne Min deposit: 100 USD Max Lev: 1 : 1000	Anzo Capital Review

Conclusion

Leverage is a progressive tool for traders to achieve good results. The obvious advantage of using leverage is that you can make a lot of money with only a limited amount of capital. On the other side, it also increases your losses if the market goes against your trades.

However, it is impossible to choose the best leverage to use in Forex for both beginners and professional participants. The best advice anyone can give is to exercise extreme caution while dealing with leverage. As beginners, we recommend you begin with a small amount of money. Never forget that the higher the leverage is, the higher the risks that will come along.