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Hi willeh, thanks for the comment! Definitely risky area considering how much leverage some brokers do provide. Higher leverage is beneficial if you prefer not

by chanar 6y ago

Hi willeh, thanks for the comment! Definitely risky area considering how much leverage some brokers do provide. Higher leverage is beneficial if you prefer not to use all available funds for trading and deposit them to your trading account. For example, lets say you are trading with 100 000 account and your risk is based on that amount. You deposit only 10000 to your trading account and take advantage of the leverage while keeping the other 90k safely in your bank account instead of having all of it on your brokers account. The brokers market has evolved in recent years as well and has become much more solid than what it used to be. Thankfully, a lot of solid brokerage firms have entered the market by now. Forexbook will also try to provide some transparency around forex. To start, there's ability to share your trades. As there is no manual trade entry on the app, all trades are as is. For example, the trade example shown on the frontpage can be seen here with greater detail (what broker and if it was Live or Demo account) https://forexbook.com/s/trades/2da6ed44-d1fd-4028-a8a0-3203f42b2336 https://forexbook.com/s/trades/2da6ed44-d1fd-4028-a8a0-3203f... PS! Sharing feature is manual and only you decide which trades to make public. Disclaimer: Maker @ forexbook.com

danuker 6y ago
> Higher leverage is beneficial if you prefer not to use all available funds for trading Can you not lose more than you have in your broker account in any case, with leverage?
- chanar 6y ago
  In most cases no but after the Swiss franc crash event back in 2015, some brokers went bankrupt because the drop was so fierce and there was no liquidity available at some point to close the trades. Many traders suffered from negative account balances. Events like these happen rarely and they are called as "black swan". https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN0KP1EH20150116 https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN...
- Galanwe 6y ago
  Yes. That is why you are often limited as individual trader to a relatively safe leverage level. Higher leverage is often possible if you post some collateral (often in the form of AAA/gov bonds). The leverage level you are granted is often dependent on the asset class and your experience with it. FX being relatively low volatility, you can indeed get high leverage without too much scrutiny. Overall it is a very lucrative business for brokers. The gathered funding fees are higher than the rare occasional losses. Pretty much like banks when doing loans.

by chanar 6y ago

danuker 6y ago

> Higher leverage is beneficial if you prefer not to use all available funds for trading Can you not lose more than you have in your broker account in any case, with leverage?

chanar 6y ago
In most cases no but after the Swiss franc crash event back in 2015, some brokers went bankrupt because the drop was so fierce and there was no liquidity available at some point to close the trades. Many traders suffered from negative account balances. Events like these happen rarely and they are called as "black swan". https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN0KP1EH20150116 https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN...
Galanwe 6y ago
Yes. That is why you are often limited as individual trader to a relatively safe leverage level. Higher leverage is often possible if you post some collateral (often in the form of AAA/gov bonds). The leverage level you are granted is often dependent on the asset class and your experience with it. FX being relatively low volatility, you can indeed get high leverage without too much scrutiny. Overall it is a very lucrative business for brokers. The gathered funding fees are higher than the rare occasional losses. Pretty much like banks when doing loans.