Best High Leverage Forex Brokers 2023
In the extremely competitive forex world, high leverage forex brokers are needed for ultimate trading experience, as leverage has the possibility to work for or against you. Nevertheless, the best high leverage forex brokers will surely work for you. While most of the brokers may offer 200:1 leverage, some brokers may also offer beyond this. Hence the highest leverage broker emerged. So, what are the benefits you can get from the highest leverage forex brokers? This article will guide you through this and eventually help you to find the forex brokers with high leverage.
When you are trading in the foreign exchange market, or forex, one of your primary concerns is about how to minimize your risk exposure while maximizing the money you will make. To accomplish this, it is important to understand how leverage can help you build up and control a huge amount of money with only a small initial margin requirement. So, understating the leverage is important and critical at the same time.
Read on to know the details of the best high leverage forex brokers.
What Does Leverage Mean in Forex?
If you are new in the forex world, you may not know many terms and their details. Leverage is such a term that can be critical sometimes. That is why many traders ask what is leverage in forex?
Leverage meaning in forex, is essentially borrowing money in order to make a winning trade. When you use leverage for currency trading, the forex brokers with high leverage lend you the money to buy or sell currency pairs using their funds. For example, if an account requires $1,000 as its minimum deposit, but high leverage brokers give access to $100,000 in its trading capacity by means of buying on margin, it could be said that the account has access to 10 times (or 10X) its money for trading.
Let's look at an example. Let's say you decide to buy a $1,000 worth currency pair using 20X leverage. This means that your broker will lend you 200 times your margin deposit of $1,000 to buy the contract, which is equal to $200,000. Now, if the pair increases by 100 points in value throughout the day and you have not changed your position size, then at closing time, you would have made a gross profit of $20,000 on this trade.
While the best high leverage brokers can help traders build up huge positions with only a small representation of their own funds, it's important to note that you will not get these benefits for free. Therefore, the highest leverage forex brokers take some cost to offer the traders such benefits. Normally, the best high leverage forex brokers charge you in the form of interest —which you will pay for borrowing the broker's funds.
For example, if you borrow $1,000 from the highest leverage forex brokers and pay an interest rate of 5 percent per annum (p.a.) and close your position after ten days, the total amount payable would be $1,050 ($1,000 plus $50 interest).
Best High Leverage Brokers List:
What is the Good Leverage Ratio for Forex Trading?
When it comes to considering the good forex leverage ratio, there are multiple factors involved with the forex brokers with high leverage. For instance, if the leverage is higher, you are definitely putting more money at stake. Nevertheless, it can make you a high profit and destroy your portfolio at the same time as high leverage is risky too.
With this said, let's take into consideration two important key factors to consider when deciding on a leverage ratio as well as high leverage brokers. The first one is that each trader should use a fixed percentage of their equity as a margin for the trade. In other words, if you have $10k in your trading account and lose half of it, which is $5k, do not open a position with more than this amount. This will ensure that you do not risk too much money at once, as well as avoid going into debt because the market turned against you.
In addition to this factor, there is another one to consider in the case of highest leverage forex brokers: Do not use more than 1% of your entire balance per trade. For example, if you have a total balance of $20k and an average profit target of 50 pips per trade (which equals 0.5% of $20k), then you should never risk more than $1 in a single trade. In this case, the only way that you could reach 50 pips would be if the market moves exactly in your favor from entry to your target. Otherwise, when you reach your profit target, and the market continues to move against you after that, it means that you will lose money. However, by not having a 2:1 leverage, which means that for every dollar lost in a trade, there is another one at stake, this increases your chances of being able to cut your losses because there was less money on the line, to begin with.
These are two main factors to consider when determining how much money should be risked per trade with the best high leverage forex brokers. It is also a good idea to give time to your trades and use a strategy that allows you to take small profits as well as cut your losses early. This will help you avoid going into debt or placing too much of your money at risk.
Positive Side of Leverage Trading
Using forex brokers with high leverage is beneficial because it allows you to use the money that you don't own. This can be advantageous if prices move strongly in your favor. It may also be losses if they move against you, so it should always be used with caution and proper money management.
Nevertheless, trading on margin or leveraging your trades with the help of the best high leverage forex brokers can provide you with an edge in the market that you would not be able to realize otherwise. While there is no free lunch when it comes to investing in forex, trading with the highest leverage broker can help you achieve returns that are greater than they would be if your investments were purchased with all cash.
Trading on margin takes advantage of what is known as "leverage." What this means is that you can control large dollar amounts of investments by putting up a relatively smaller amount of money. Therefore, if done correctly, the additional funds provided by the high leverage brokers who buy your pair (for example) will definitely increase your return on investment (ROI). Further, as long as the market appreciates in value during the time frame you own it and assuming you make your interest payments on time, the best high leverage forex brokers can be a great way to increase your profits.
Downside of Leverage Trading
Over the years different financial crisis have revealed the hidden and dangerous nature of leverage and how easily it can be used to create profits or huge losses. Nevertheless, investors who use leverage, such as margin trading, need to know how to make smart decisions with this tool.
Leverage is what makes forex trading so beneficial for many traders. But many new traders don't know how does leverage works or why they should use it. Hence, if you are not using leverage correctly, then it can actually be very detrimental to your trading results.
Then, what are some of the downsides that people may face when trading forex with the highest leverage broker. Well, for starters...
The Risk on Your Account is Magnified Due to High Leverage Ratios
The biggest problem with high leverages ratios is that you have so little margin for error in trades. So, if you make a wrong move in the highest leverage in forex, then it can wipe out a large portion of your account balance in an instant.
Nowadays, most forex leverage regulations offer clients access to 'fixed margin' accounts, which means that no matter how much leverage you use, your trading account is only allowed to go into negative balance by the same amount as your initial deposit.
If you have less money in your forex account, which means that, even if your position size is quite small, the amount you stand to gain from good trades is not very big. However, to avoid the risk from a high leverage ratio, you may look for the one with the lowest leverage ratios.
Slippage due to High Leverage Trading
Slippage may occurs when your stop-loss is triggered but not at the price that was originally placed. While it is the trader's responsibility to place their stop losses correctly, slippage can happen if the high leverage brokers don't have enough liquidity for whatever reason.
For example, at 100:1, leverage an order worth $10,000 needs $100 million in available liquidity just to cover its size. That's a big order for most forex brokerages, so slippage can be expected.
You Have Limited Control Over Your Trade Sizes
Let's say you are following the news, and suddenly EUR/USD shoots up by 200 pips. If you had access to 100:1 leverage via the highest leverage broker, then that means you would make 2% profits from it. Pretty good, right? There are two problems with this scenario.
First, the movement in forex prices is unpredictable. So how can you possibly know whether your trade will be profitable in the next 5 minutes or not? The second problem is that you don't have access to 100:1 leverage unless you are trading with one of the highest leverage forex brokers.
Most traders are just starting out in retail forex trading using 50:1 leverage through the high leverage brokers, but even that's too high for many traders. Nevertheless, it is not wise to go over 10:1 when trading and only ever place trades when there's lots of room for them to grow. That's how the chances of getting something wrong are greatly reduced with the best high leverage brokers.
Getting Start with the Highest Leverage Broker
Below is a step-by-step guide on how to get started with high leverage brokers. It is important that you take your time when signing up with a new broker so that you'll have the highest chance of success in trading with them.
Do your Homework First
When looking for the high leverage brokers, the first thing you need to do is to check out each brokers' website and sign up for a demo account if they offer one. Further, check out what type of spreads they offer, their execution policies, and any promotions they may have gone on. If the offerings sound good with the forex leverage regulation- move on to the next step.
If not, then we would suggest you skip onto the next highest leverage broker because, from our experience, these bad practices are often seen throughout their website.
If you're wondering what is included in each section of the high leverage brokers, we will be explaining briefly below:
- The Spread - How much pips are shaved off your trades by the broker. The smaller this number is for forex, the better it is for your trading account!
- Execution Policy - This outline how fast or slows they are to fill your orders. You will want a broker that fills as quickly as possible to prevent slippage. Slippage is when other traders push through larger orders before yours causing your trade to not execute at the price you initially wanted it to, forcing you into taking an unfavorable position of having to cancel your order altogether, which can result in slippage fees if your broker charges them!
- Promotions – Sometimes, the highest leverage forex brokers offer a bonus attached to the trader's account as this will only distort the true value of the trading results. Therefore, it is important to read through and see if your desired highest leverage broker offers any bonuses and also whether they are connected to any conditions such as volume requirements. If there are no promotions offered, this is fine too, as having bonuses is not mandatory, and it cannot really do anything for traders anyways.
- Customer Service - You also want to make sure that you can contact the high leverage brokers customer service team quickly and easily in case you ever need assistance with anything such as getting started or payment options. Some brokers offer live chat on their website where others may not be as quick but instead prefer email support which is totally fine as well.
- Account Currency - Lastly, I recommend checking the account currency of that highest leverage broker that you will be trading in. This should be your native currency or the popular currency. So, if you live in Canada, for example, look for brokers who offer their trading accounts in CAD, not USD! Using an account with your native currency can help you save some money on bank charges when withdrawing and depositing into your trading account.
Deposit Money to your Highest Leverage Broker
Once you pick the top forex brokers with high leverage, you will need to deposit money in them to start the trading. So, you can deposit funds to your registered highest leverage broker by clicking or tapping the deposit option. Nevertheless, you will get many local and international methods to put money in your account.
You should also strictly keep in mind that some high leverage brokers offer bonuses for deposits. Further, bonuses may also offer in other ways depending on your deposit. The alternative way to receive bonuses is to offer to traders who are profitable. However, top forex brokers with high leverage don't usually give out free money after all. So, by opening an account with this type of deposit structure, you're setting yourself up for failure and missing out on the true potential of your trading account. Therefore, get to know all the conditions and deposit structures offered by the best forex brokers.
Further, we recommend breaking out a separate bank account and depositing to the best high leverage forex brokers solely what you can afford to lose, and always make sure that this amount sits safely in your checking account as emergency funds. Trading is very event-driven, and most of the time, it's hard to predict exactly where the market will go, so avoiding large drawdowns from happening requires a strong level of support from your regular deposit as well as money set aside for those "just-in-case" scenarios which could happen at any time even if you're an experienced trader!
Start Trading with Top Forex Brokers with High Leverage
Now you are all set to start trading with the broker as you have deposited your fund. However, if you are not experienced, we will not suggest using the leverage initially. Even experienced traders should not use the leverage in their first trading. Instead, traders should observe the broker, and they take leverage according to the needs.
Things to Look While Choosing the High Leverage Brokers
The trading world has numerous best high leverage forex brokers. The lower your leverage, the less money you can make when you are right about a trade that eventually leads to profits. Here are top important four things to look for when choosing forex brokers with high leverage.
What kinds of risks will your capital be exposed to? Keep in mind that volatility is high leverage brokers work both ways. So, you may choose from the top 100 regulated brokers with high leverage who offers more than 100:1 leverage, while best high leverage forex brokers US clients may get up to 50:1 leverage. However, no matter how much risk there is in your account at any given point, you should have enough equity in it if the worst were to happen. Always remember that if you are unable to cover your margin requirements when your position moves against you, then your broker is required to liquidate your position.
Commissions and Fees
While many high leverage brokers charge fees for opening or closing trades, it is important to be aware that this may not always be the case. Before you sign up with the best brokers with high leverage, check out what their commission rates are because it could save you a bundle over time if the commissions aren't too high. Also, keep in mind that some best high leverage brokers offer discounted currency exchange commissions to clients who do their stock trading with them as well.
If you plan on using any special trading platforms or programs with the best brokers with high leverage, then you need to look for the highest leverage broker who offers them at no extra cost. Nevertheless, MetaTrader 4 is the most popular platform out there, but some high leverage brokers will only offer it if you open an account with several thousand dollars in it. If that doesn't work for your situation, then don't despair because many equity and currency brokers offer MetaTrader 4 or MetaTrader 5 platforms without imposing any conditions.
Account and Trade Minimums
Just like any investment, your potential returns are determined by how much money starts out in your account. So, unless you plan on trading, the maximum allowed size right from the get-go, make sure to find a broker with low minimums trading or deposit (some offer as little as $1). You should also keep in mind that some of the best high leverage forex brokers will offer micro accounts with no minimum requirements for people looking to test out a new account without spending too much money.
Leverage Trading Example with a Highest Leverage Broker
Let's look at an example of how using leverage with the highest leverage forex brokers can help you make money trading forex. Imagine that the base USD/EUR rate is 1.3000, and you believe it will rise to 1.3200 in the next five days. So, you put up $10,000 as margin on a five-day 100:1 position, buying 10 million EURUSD contracts with your US$10K deposit. Because each contract covers €125,000, you have just bought yourself €1,250m of "potential profit."
If the EUR gains against the dollar by 0.01% over those five days so that USD/EUR rises to 1.3201 (the exchange rate hasn't moved but you are now long €125,000), you have made €250 on your €10,000 deposit, which is not bad.
Alternatively, if the EUR falls against the USD by 0.01% to 1.3199 (the exchange rate hasn't moved, but you are now short €125,000), you make a loss of €250. But wait: because of your 100:1 leverage and because each pip is worth only $10, the total value of this position is actually only 0.13% x $10 per pip x 10 million contracts = $10000 or almost exactly what you deposited as margin into your forex account in the first place. So even though it's gone "negative," you're still up overall.
Imagine that instead of rising to 1.3201, the EURUSD rate falls to 1.3100 over your five-day holding period. You are now "long" €125,000, which you have bought at $1.3101 x €125,000 = $163,762 - so you have lost about 15% of your initial margin deposit on this trade! But wait - because you are still 100:1 leveraged and each pip is only worth $10 whatever the size of your position, the total value of this position is just 0.15% x $10 or just $150 per pip times 10 million contracts = $1,500,000 or almost exactly what you deposited as margin into your forex account in the first place. So even though it's gone "negative," you're still up overall.
This is why many forex traders prefer the highest leverage broker; it enables them to take positions bigger than they could afford with cash alone.
Forex Leverage Regulation
One of the biggest problems for traders of all levels is to find out which high leverage brokers are trustworthy and which offer fair conditions. One of the things that make this process easier is to get information about the different forex leverage regulations. A good way to do it is by looking at how their reviews, including regulatory issues. Regulators are there to protect consumers from abusive brokers who want only profit without caring for customers' interests. Before you join a highest leverage broker, it's always better to check if they are regulated by a proper financial authority who will help resolve disputes in case something goes wrong. Some of these have rather strict rules, especially when it comes to offering some really dangerous services like forex trading with high-leverage ratios.
Most financial regulatory bodies have strict rules on how brokers can deal with their customers. They usually put a limit on the leverage ratios that are offered to clients so they would not experience any kind of problems on massive losses due to brokers who want only profit without caring for their client's interests. For example, High leverage forex brokers US clients get the opportunity of strict regulation. Hence, Americans can choose any US forex broker with highest leverage to get optimum benefits.
So, when choosing the broker, make sure you check with all the possible foreign exchange regulation in the world and verify with the forex leverage regulation.
Benefits of Trading with High Leverage Brokers
Normally, leveraging in trading is thought of as a disadvantage because it can increase losses. However, taking a higher risk and using more leverage often results in larger gains if done correctly. Therefore, the highest leverage forex brokers have-
- The potentiality for greater returns
- The chance to take on low volatility trades (favoring trending markets) without needing a lot of capital.
This means you can make trades with smaller amounts of capital through the high leverage brokers, which makes trading much easier to do. Also, this allows traders to build their position sizes up faster than they could normally by adding another digit to the total traded amount (i.e.: instead of risking $100 on a trade, you may be able to risk $1,000). This has the same effect as increasing the value of traded contracts by a factor of 10. The increased turnover can also give a trader more information for making profitable trading decisions which will further increase profits.
In summary, the benefits from increasing risks and leveraging through forex brokers with high leverage are:
- Large returns
- Ease of execution
- Trading with low capital
- Chance to make low volatility trades
High leverage forex brokers are the best choice for traders who prefer to trade with low sums of capital.
Following are some of the top benefits of trading with the best brokers with high leverage.
The obvious reason for anyone considering trading with the best high leverage forex brokers is that they can make more money. If you can use 100:1 or higher, then every pip movement in your favor will be multiplied by this value, and the resultant gain will correspondingly increase. Let's say, you place a trade on the EUR/USD, and it moves 5 pips in your favor. You could receive 50 ticks (i.e., 50 pips). But if your broker allows you to trade at 1000:1, then those five pips would now translate into 250 pips. As you can see, this provides much greater returns than normal and should always be considered as an opportunity, especially when trading such high-volume pairs like the EUR/USD.
Increases Capital Efficiency
When trading with the highest leverage in forex, you can trade currencies that are normally not possible due to their low margin requirements. For example, if you had $10,000 in your trading account and wanted to use 50:1 leverage, but the lowest leverage offered by your broker was 200:1, then this would mean that you could only open positions on pairs worth up to $500 or less per lot (not taking into consideration the cost of commissions, etc.). If, instead, your broker offers 1000:1, however, then this would equate to $50 per pip movement. Not all forex brokers with high leverage will allow you to take advantage of such conditions, so make sure to keenly check this with the broker you intend to use before opening an account.
Eases Low Volatility
Most of us know that trading Forex is a lot like gambling, and this is also true for those traders who can only take advantage of low leverage (for example, 50:1). When trading on such small margins, we essentially need movement in our favor to make money, and if we do not get it, then we actually lose capital which is why many novice traders will experience consistent drawdowns as they lack the ability to withstand such volatility. On the other hand, when your high leverage brokers allow you to trade at higher levels of leverage (1000:1 or even more), then you don't necessarily need as much pip movement as often it is enough to enter a trade and then exit it soon after for a small profit. This makes Forex trading much easier as you don't have to sit there all day watching your screen and observing the fluctuations due to changes in currency values.
Cons of Trading with High Leverage Brokers
While trading using forex brokers with high leverage can enjoy a number of advantages, there are some risks that come with low margin rates. These include:
Risk of Loss
Low margins mean that a large movement of the market in either direction is more likely to be magnified by margin requirements and lead to significant losses. In other words, you will not have much wiggle room if your trades go wrong. It is our opinion that this risk is heavily mitigated by hedging/taking profits early, but it's worth mentioning here as one of the cons of high leverage forex brokers. Generally speaking, higher-margin rates equate to greater potential profits but also greater potential for loss.
Having a constant margin requirement on your account is limiting. You can't go long or short without pushing this limit, and it's the same no matter the state of the market - up, down, sideways. On the bright side, many high leverage brokers will re-adjust your required margin levels according to market movement, so you'll never have to worry about taking quick action every time you open a live trade.
Ongoing financial charges by the highest leverage forex brokers are one of the cons. Even if you choose not to pay interest through denying access, the broker may still charge on any unused balance on your account, even if that balance is negative due to outstanding positions (long or short). Remember that some brokers charge flat fees instead of financing costs and that dealing with credit cards can be very expensive too.
Margin Call Risk
Because lower margins mean less room for error, the risk of a margin call is higher than those who trade on larger margins. Therefore, you always need to monitor your trades closely with the forex brokers with low leverage or high leverage and watch out for small fluctuations as they may lead to larger movements in the market. If you don't want to deal with this, then opt for a broker that offers a variable margin rate rather than a constant one.
Tips to Trade with Top Forex Brokers with High Leverage
Brokers use different kinds of leverage at their disposal to attract new clients and traders with low capital. However, it does not mean that you have to take advantage of all these high-leverage offers without any precaution. Therefore, applying some tips and tricks will be handy.
- You should compare among the brokers and select the highest leverage broker only if you know how to manage risk appropriately. Otherwise, it will be too easy for the broker to take all your capital by closing your positions at the worst time possible.
- Always ask your regulated brokers with high leverage if they allow trailing stops and how it is done. This is a risk management technique that allows you to lock in profit as the price moves favorably and cut losses before they happen.
- Don't use the same high-leverage ratio for all your trades, but be more discriminant with long-term investments than short-term trading.
- Use a fixed trading strategy and don't start improvising if things are not going well. If you aren't sure how to use leverage properly, then the best thing is to avoid buying Forex contracts with it.
- Always take gains and move on when the opportunity arises. It doesn't matter how much you made in terms of percentage, but try to maintain a win-loss ratio that is closer to 1:1.
Relationship Between Leverage and Margin in Forex Trading
Why is it important for a trader to know how leverage and margin are related? The answer is simple - risk management. In order to keep the risks within certain limits, we need to understand what the impact of using the same percentage of leverage will be on our equity if we use different amounts of margin. Moreover, it would be much better to know in advance how much we can trade, knowing what our account balance is.
As we can see, there are certainly some great benefits associated with trading online via the best high leverage brokers, and it should be something that every trader considers, especially if they want to maximize their returns on capital. Of course, using such highest leverage forex brokers does not come without risks, but the rewards can far outweigh these for those traders who do know what they are doing.
One common mistake that new traders make when they first start out with forex brokers with high leverage is always looking for reasons why their trades didn't work out. Nevertheless, in this case, trader may change the broker and choose any of the top 100 regulated brokers with high leverage we have mentioned in this article.