FBS offers 1:3000 leverage. Table of Contents
FBS 1:3000 – the highest in the world
Leverage is one of the great tools you can use when trading Forex online.
With FBS, you can utilize up to 1:3000 leverage to trade in the Forex market.
FBS’s 1:3000 leverage, in fact, is the highest leverage available in the world.
By using FBS’s 1:3000 high leverage, you can increase your trading volume by 3000 times.
For instance, if you have $5 in your live trading account, you can use it as margin and place an order of up to $15,000.
The leverage is used to increase the trading volume more than the amount you have in your trading account, and will also increase the rate of profit and loss you will generate with the position.
You haven’t tried FBS’s 1:3000 yet?
Open a Forex trading account with FBS and experience the extraordinary Forex leverage today.
Note that the available maximum Forex leverage is different depending on the account type you choose with FBS.
Visit the page here, for the list and comparison of all trading account types of FBS.
How does Leverage work?
One of the attractions of Forex Margin Trading (FX) is that you can expect large returns by making leverage and trading, but at the same time, it also increases risks.
Let’s consider the case where you make a transaction with a margin of 2,000 USD.
If you open an open interest worth 10,000 US dollars, the effective leverage will be 5 times.
If you open an open interest worth US$20,000, the leverage will be 10 times.
If the EUR depreciates from the original 1 USD = 1 EUR to 1 USD = 1.05 EUR, a gain of 500 EUR will be obtained if the leverage is 5 times, and a profit of 1000 EUR will be obtained if the leverage is 10 times.
On the other hand, if the exchange rate rises to 0.95 EUR against the US dollar, a loss of 500 EUR will be created if the leverage is 5 times, and 100 EUR will be created if the leverage is 10 times.
The higher the leverage, the higher the loss.
Now that’s just an example of using 1:5 leverage.
Think of what you can achieve by using 1:3000 leverage of FBS, as that is simply impressive.
Stop Out at 30% Margin Level
Forex margin trading (FX) also has a function to suppress loss.
One of its functions is “Stop Out”.
Stop Out is a function that when a trader’s loss expands and reaches a certain level, all open positions are automatically settled with a market order, the loss is fixed, and the transaction is closed to prevent further loss expansion.
To understand the rule of Stop Out, let’s first check the following three terms.
1. Minimum required margin
The minimum margin is required to open a new open position.
Since the leverage of FBS is up to 3000 times, the amount of margin required is equivalent to 0.03% of the USD valuation of the open position.
If 1 USD = 1 EUR, and you open a position of 30,000 US dollars, the margin requirement will be only 10 EUR.
2. Effective margin
“Effective margin” is obtained by adding or subtracting trading gains and losses from the deposited margin.
If there is a profit or loss in the open positions that you have, the margin amount calculated by adding or subtracting the profit or loss amount to the trader’s deposit margin is called “effective margin”.
The higher the open position loss, the lower the effective margin amount, and the higher the profit, the higher the effective margin amount.
3. Margin maintenance rate
“Margin maintenance rate” is calculated as “effective margin / required margin”
Divide the effective margin of (2) above by the required margin of (1) to calculate the “margin maintenance rate”.
Margin required / Margin required = Margin maintenance rate
Since the amount of effective margin becomes smaller as the open positions in the account loses, and becomes larger as profit is made, the margin maintenance rate also fluctuates accordingly.
If the margin maintenance ratio in (3) above falls and reaches 30%, “Stop Out” is executed to prevent further loss expansion (effective margin and margin).
You can check the status such as the maintenance rate on the Forex Margin Trading (FX) transaction screen).
How to avoid “Stop Out”
Although we want to prevent further loss expansion, we also want to avoid Stop Out in which all open positions are automatically settled.
In order to respond to the need to “prevent loss at an earlier stage than loss is cut”, FBS sends pre-alert emails and alert on the platforms to notify traders of the margin maintenance rate.
A pre-alert email will be sent when the margin maintenance rate drops to 80% level.
In order to avoid Stop Out, please close some open positions yourself to reduce the amount of loss, or add margin to increase the margin maintenance rate.
In addition, as a way to reduce losses, there are also methods such as “Stop order” and “Trailing Stop order” which you can see in various ways of ordering.
For example, if you want to terminate a transaction when the USD’s appreciation of 2 cents is high to prevent further loss, you can place a stop order so that when the exchange rate reaches the specified level, the stop loss order will be executed automatically.
If the exchange rate fluctuates sharply, the order may be contracted at a rate that is less favorable than the specified price, but it is a very effective way to limit the amount of loss.
Know the Importance of Stop Loss
It would be nice if we could make a profit every time we make a deal, but that is not the case in reality.
So you need to fully understand that you can lose money at anytime in the Forex market.
In foreign exchange margin trading (FX), not only the profit amount and loss amount of individual transactions but you also need to think how efficiently you can operate with the total of profitable transactions and unprofitable transactions.
For this reason, it is important that the open positions with loss is closed (stop loss) before the loss becomes too large, in order to connect it to the next transaction.
That is where “Stop Loss” comes in, and the use of Stop Loss is a very important thing when trading in the Forex market.
You can find out more about these pending orders “Stop Loss” and “Take Profit” in the page below.
What are Stop Loss and Take Profit?
Risk associated with Forex Margin Trading (FX)
While foreign exchange margin trading (FX) has many attractions, it also poses potential risks.
It’s important to understand the risks, control them, and deal with them.
Especially when using FBS’s 1:3000 high leverage, which you can experience larger amount of profit and loss comparing to the amount of margin you have in your account.
Here, we will explain the typical risks related to foreign exchange margin trading (FX).
1. Currency fluctuation risk
With foreign currency investment, there is a risk of a foreign exchange loss if the exchange rate fluctuates unexpectedly.
In foreign exchange margin trading (FX), there is a foreign exchange loss when you start trading from buying when the USD rises and when you start trading from selling when the USD depreciates.
Although foreign exchange margin trading (FX) also has functions to reduce losses (Stop Out and Stop Loss etc.), there is a risk that losses will occur larger than expected in the event of rapid currency fluctuations.
2. Interest rate fluctuation risk
Forex margin trading (FX) has swap points, but the level of the swap points is linked to the interest rate of each currency.
Since interest rates fluctuate depending on the economy and policies of each country, the swap point level will be reviewed from time to time.
Also, in general, you can get swap points for transactions that sell currencies with low interest rates and buy currencies with high interest rates, but if interest rate levels reverse, you may have to bear (pay) swap points.
How to calculate Swap Points for my positions?
3. Liquidity risk
Depending on market conditions, a currency with low liquidity may not be able to offer the rate you specify even during business hours of financial institutions, making it difficult or impossible to make a transaction.
4. Leverage risk
In foreign exchange margin trading (FX), leverage allows you to trade larger amounts than deposit margin, but if the exchange rate or interest rate fluctuates unexpectedly, the amount of loss will increase due to the effect of leverage.
Please check FBS official website or contact the customer support with regard to the latest information and more accurate details.
FBS official website is here.
Please click "Introduction of FBS", if you want to know the details and the company information of FBS.
IronFX
Comment by Diletta
March 26, 2024
Awesome bonuses, good leverage. A few hiccups, but support rocks!