High Leverage Brokers ASIC

High Leverage Brokers ASIC

High Leverage Brokers ASIC Comparison Table
Online Broker Trading AccountMinimum DepositTrading PlatformsMaximum Forex Leverage
$100MT41000:1
$200MT4, MT5500:1
$200MT4, MT5, cTrader500:1
$100MT4500:1
$100MT4, MT5500:1

High Leverage Brokers Regulated in Australia

Leverage is the capacity to make a trade using less than the value of the market being traded. The unit of Forex trading is a lot. The unit for each move in a Forex pair is called a pip. As the Forex pair moves it changes value.

If the trader goes long on a market then as the Forex pair increases in value, the trader's account increases by the value of the move. If Forex pair decreases in value, then the trader's account decreases by the value of the move. If the trader goes short, then as the Forex pair decreases in value, the trader's account increases by the value of the move. If Forex pair increases in value, then the trader's account decreases by this amount. These changes in value are not realised until the position is closed, but they can still directly affect the account before being realised.

When leverage increases, the amount of the account which is taken up by the cost of the trade decreases. This exposes more of the account to adverse moves, against the traded position. The trader can manage this effect by using a stop-loss. Otherwise as the account decreases, it may trigger a stop-out, which closes positions to protect the capital. With higher leverage, the trader can trade with an increased pip value. Thus leverage can magnify the effect of a move against the traded position. What this means is that the value of the account needs to be factored into the use of leverage, as it is directly affected by the trade, before any change in value is locked in by the position being closed.

The temptation for traders is to use high leverage with too small an account value and increasing the value of a pip, thus not giving the trade enough room to move. This is important because Forex moves in complex ways, up and down, creating patterns. Thus even if the trade works out, it may spend some time going in the opposite direction to the traded position. So what happens is a trade which cannot work as it triggers or gets too close to a stop-out or simply eats up too much of the account value making the trader close the position. If the trader has a small account size, then one potential solution is to trade with small trade sizes which reduces the value of each pip (for example micro lots), rather than using higher leverage.

Maximum leverage is typically for Forex, and other markets can have considerably lower leverage. These brokers are all regulated by the Australian Securities and Investments Commission (ASIC).

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