The trader presently has $130,000 in his possession after only investing $260. A trader may open a position with only $260, employing leverage of 1:500 (130,000 / 500). Based on a contract size of 100,000 per lot, a trader without leverage would need roughly $130,000.00. Let's use the well-known forex pair GBP/USD as an example.

Using high leverage to trade your chosen forex pairs, cryptocurrencies, and other markets without needing to make substantial financial commitments is a profitable strategy. A trader can open a position with a big contract size for less money by using leveraged trading. Leverage is essentially borrowing money from a trading account. These include the South African rand, the Hungarian forint, and the Polish zloty. GBP/AUD, EUR/CAD, and NZD/CAD are a few examples, but there are more as well.Įxotics - These are, to put it simply, less well-known currencies with significant levels of market volatility. These are believed to be less predictable than major pairs. Major Pairings: The eight widely traded pairings that each contain one of the following currencies: EUR, CAD, GBP, CHF, JPY, AUD, or NZD, and the US dollar (USD) as the base or counter currency.Ĭross Pairs: Any pair of two prominent currencies that do not use the US dollar as either their base currency or counter currency is referred to as a cross pair. To categorise pairs, there are three basic divisions used: If you were to 'buy' EUR against USD, you would bet that the euro would do better than the US dollar. When deciding which currencies to trade, you'll see they come in pairs. How we trade these currencies or conduct forex trading is based on how one currency performs in comparison to another. By doing various studies and research, we traders can anticipate how a specific currency will behave on the market.

There are 180 recognised currencies in use throughout 195 countries.

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