Leverage Rules

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Alainfx is the best FOREX trading platform offering user-friendly trading experience with the fastest execution with the MT5 server. We promise no re-quotes and no rejections in online trading with Alainfx. Our flexible leverage system assists traders in maximizing their profit and minimizing their risk. The leverage range depends upon the type of trading accounts and the volume of funds in the account.

At Alainfx, the amount of leverage ranges from 1:1 to 1:400 on trading in the forex market. Higher the amount of funds higher would be the margin requirements. It is due to the increasing cost of hedging in the open orders. With an increase in the margin requirements, the leverage also changes and increases.

At Alainfx, there are no restrictions on trading strategies. With our flexible leverage system, a trader enjoys complete freedom in choosing trading strategies depending on their deposit size.

Leverage Ratio and Minimum Margin Requirements

Leverage is the ratio that expresses the margin requirements imposed by the broker. It can be explained by an example, if a broker requires minimum margin as 2% in an account, a trader must maintain at least 2% of the total value of a current trade available as cash in the account, before you proceed.

Leverage ratio can be expressed as, 2% margin is equivalent to a 50:1 leverage ratio (1 divided by 50 = 0.02 or 2%). The relationship between leverage and minimum margin requirements can be understood as -

EAs a trader, it is important to understand both the benefits and the pitfalls, of trading with leverage.

Using a ratio of 50:1 as an example means that it is possible to enter into a trade for up to 50 dollars for every dollar in the account.

Margin-based trading can be a powerful tool – with as little as $1,000 of margin available in your account, you can trade up to $50,000 at 50:1 leverage.

It means that investing $1,000 to the trade; you have the potential to earn profits on the equivalent of a $50,000 trade. Of course, in addition to the earning potential of $50,000, you also face the risk of losing funds based on a $50,000 trade, and these losses can add up very quickly. Traders suffering a loss without sufficient margin remaining in their account run the risk of triggering a margin closeout.

The profit or loss for a trade is not realized until the trade is closed. An open trade or position is said to be unrealized.

Margin Closeout

At Alainfx, we value our clients’ funds and your wealth. Our assistance in trading helps the traders in maintaining the minimum margin and avoids trade loss. When a trader trades on leverage, the funds in his account (the minimum margin) would serve as his collateral. Therefore, the broker does not allow the account balance to the range below the minimum margin.

When a trader has one or more trades, we as a broker simultaneously calculate the unrealized value of his/her positions to determine the Net Asset Value (NAV). Sometimes, there is a risk when a trader’s open positions lose its potential value that may lead to a reduction of the remaining funds below the minimum margin. Such a situation is known as margin closeout. At Alainfx, a margin closeout leads to ceasing all tradable open positions automatically at the current FX trade rates at the time of market closing. As a trader, you should avoid the situation of margin closeout and trade responsibly.