Understanding leverage and margin is crucial for Forex trading, particularly on Exness. Here's a concise overview:
Leverage
Leverage allows traders to control a larger position with a smaller amount of capital. It is expressed as a ratio (e.g., 1:100). For example, with 1:100 leverage, $1,000 can control $100,000 in the market. Leverage magnifies both potential profits and losses.
Margin
Margin is the amount of money required to open a leveraged position. It acts as a security deposit. If leverage is 1:100, a position of $100,000 requires a margin of $1,000. Exness automatically calculates the margin needed when placing a trade.
How They Work Together
When you open a trade, Exness holds the margin amount in your account, ensuring you can cover potential losses. Higher leverage reduces the margin needed but increases risk. Proper risk management, such as using stop-loss orders, is essential when trading with leverage.
For more details on leverage and margin on Exness, you can refer to their official guide.
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