When trading forex with leverage it is important to understand the difference between lot size and leverage to be able to choose the correct position size. In Forex, lot size refers to the position size while leverage acts as a…
Many traders choose to start with spot trading to learn execution without the added pressure of margin or liquidation risk. There are many advantages to avoiding high risk trading such as smaller losses, no risk for liquidation or margin calls,…
During the past month, Bitcoin has been on a bull run and broke the important $30.000 level on the 11th of April. While this rise in price has been a boon for all Bitcoin holders, those using leverage on certain…
Margin requirement is the collateral that backs a leveraged position. Traders who use futures, perpetual contracts, CFDs, or margin accounts rely on posted collateral to absorb losses. When collateral runs out, the position is closed, often automatically. Understanding how requirements…
When traders talk about 1:2 leverage (also written as 2x leverage), they mean doubling their buying power with borrowed capital. At this ratio, every dollar you deposit controls two dollars in the market, a balance that increases both profits and…
When traders talk about 1:1 leverage (also called 1x), they simply mean trading with no borrowed funds, the same as buying and selling in the spot market. At this ratio, your buying power is limited to the cash you deposit,…
Spread betting uses leverage to take positions without owning the underlying asset. This increases both potential outcomes and requires careful control of risk at all times. Leverage and margin work together to increase position size. This can be useful in…
Negative balance protection is a broker policy that prevents a trading account from going into debt. If losses exceed deposited funds during extreme volatility, the broker absorbs the difference. This is a legal safety net, not a trading advantage. Many…
A margin call is triggered when account equity falls below the broker’s maintenance margin threshold. It is the broker’s way of saying: add funds now, or positions will be closed. Margin calls are common when position size or leverage usage…
The liquidation price is the exact price level where your broker or exchange will automatically close your position to prevent further losses. In other words, it’s the point where your margin can no longer cover the risk. Liquidation mechanics take…