How does SuperForex's 1:2000 FX leverage work?

Currency prices fluctuate daily due to various factors such as economic index announcements, news, and geopolitical events.

Some currency pairs are more volatile than others, and a stable economy in a country usually means less volatility.

For example, in the world’s most traded currency pair, EUR / USD, the average day fluctuates by about 100-150 pips (about 1%) a day, with big announcements like the NFP and ECB. It can fluctuate by as much as 200 or 300 one days.

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What is Leverage? How does it work?

Leverage is defined as the ratio of capital used to trade the required margin.

In other words, leverage allows you to handle larger dollars with a relatively small deposit (user margin) in your transactions.

For example, if the EUR / USD rate fluctuates from 1.1305 to 1.1405 by 100 pips and you have invested US1000, you will get a profit of $ 10 on that transaction.

However, by using leverage at a ratio of 1: 100, the $ 1 you invest is worth $ 100, so you can trade $ 100,000 with a margin of $ 1000. Therefore, the profit of $ 10 is amplified up to $ 1000.

Leverage can also be thought of as a loan.

If you own $ 1000 and use the same amount of ‘loan’ as $ 100, you will be trading $ 100,000. Once the transaction is complete, you will return the amount of the ‘loan’ and make a profit.

It should be noted that leverage is often considered as a double-edged sword, as price volatility increases the probability of stop-loss in high-leverage accounts.

Therefore, most novice traders will prefer to know how to properly use risk management to minimize losses by starting with the use of minimal leverage.

Experienced traders may use higher leveraged accounts to maximize the benefits and profits of foreign exchange over other financial markets.

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Leverage on SuperForex’s platform

SuperForex offers a leverage ratio of approximately 1: 2000 and guaranteed stop loss to ensure that you take advantage of forex trading while preventing the risk of your account balance becoming negative.

Leverage on SuperForex can be used for limit orders in day trading orders, bookings and options trading.

When you open a transaction on SuperForex, choose a transaction amount that includes the amount required for the loan and investment or the amount you are exposed to risk.

If the transaction amount is exposed to risk, more leverage will be used.

And you can see that the stop loss rate fluctuates accordingly.

The higher the risk, the closer the stop-loss rate will be to the market rate.

If the stop-loss rate exceeds the market rate, the transaction will be closed to ensure no continued loss.

This is one of the safety features of this platform, and the benefit that SuperForex offers to traders is guaranteed stop loss.

And unlike other brokers, traders are not charged.

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