Is it true that overseas Forex traders are high leveraged and narrow spreads too?

As overseas Forex companies can generate revenue more efficiently than investing in domestic Forex companies, more people are making investments by opening new accounts. Overseas Forex is not under Japanese rule, and the advantage is that Forex can be done according to the rule of that country. Leverage and spread which are important points in Forex trading are greatly different between domestic and overseas.

For those who do overseas Forex for the first time, there may be uneasiness and embarrassment, too. However, as the number of Japanese who do overseas Forex is increasing, some overseas Forex companies also enrich Japanese language support to encourage users. It is also possible to do Forex with small risk if you invest well using it.

Overseas Forex traders can do Forex with high leverage

Overseas Forex traders can do Forex with high leverage

In Japan it is only possible to trade up to 25 times leverage. Although it was also possible to invest more in high leverage in the past, but it was lowered from the viewpoint of risk. Contemporary Forex is the mainstream with trading scalping that generates profits by trading many times in a day. In order to increase revenue per turn, trading in high leverage is efficient.

In the first place, leverage is a mechanism that allows you to trade on the premise that you have a large amount of funds even with a small amount of funds. Trading in high leverage have a large return, on the other hand, the loss increases when losing. In Japan, if a sudden exchange rate fluctuation happens and you cannot respond with loss cut, you will be subject to a margin call that you will have to pay later, so you will be subject to high risk of dealing in high leverage.

Risk gets higher for trading overseas Forex with high leverage. However, unlike domestic Forex, since you do not receive a margin call, so even if the loss becomes bigger, the account will only be zero and you will not need to pay any further. It is possible to minimize the risk even if you conduct a scalping trade with high leverage.

The upper limit of leverage which can be applied by overseas Forex companies is different. Of course, the higher the leverage is, the higher the profit will be, but as the fee each time will also increase, you need to be careful. When choosing a Forex company, it is necessary to proceed with the procedure for opening an account after confirming whether it is possible to make trading with high leverage in advance. Depending on a dealer, it is possible to trade at 500 times more leverage.

Also, as for the level of the loss cut which is forced settlement when the loss expands, it is not too low if dealing with high leverage. There is a tendency for the market to go up to a certain vector while always going up and down. Even when a sudden exchange rate fluctuation occurs and the loss expand temporarily, if the value of the loss cut is low, it can endure, and when loss settlement is in recoil, it is possible to minimize the loss. If the level of loss cut is high it will not be able to withstand market fluctuations and it will be forcedly settled without waiting for a reaction.

The narrowness of the spread of overseas Forex changes according to circumstances

Since overseas Forex can be used with high leverage, it is common to trade by scalping. In this case, as the spread of the fee paid to the securities company that opens the account is narrower, the trading cost per transaction decreases, so it is suitable for scalping.

There is a big difference in the mechanism of spread when comparing the spread of domestic Forex and overseas Forex. In domestic cases spreads are fixed, so they do not fluctuate and are stable. Spreads of overseas usually go up and down regularly, spread range widens significantly than domestic Forex, sometimes it suddenly narrows after a few hours.

Some overseas Forex beginners are beginning to feel attractiveness of narrow spread. As long as it is narrowing due to fluctuating spread, you can certainly trade at a lower cost than domestic Forex. However, in case of overseas Forex where scalping is the mainstream, the spread in each trade will be different, so it is not a good idea to refer only to the minimum spread. It is prudent to trade with reference to the average value on the premise that the spread is constantly changing.

If you do Forex in a narrow spread even a little, trading with the aim of narrowing the spread is recommended. A narrow spread means that the trade is stable and the risk is small. As the number of people doing trade increases, there is a correlation that the spread becomes narrower as price movements become smaller, and the spread narrows at night when trading volumes increase.

A balance of leverage and spread in mind when trading is important

OA balance of leverage and spread in mind when trading is important

Low leverage and low spread is basic in domestic Forex. If there is sufficient fund, there is a merit of doing fund formation for the domestic Forex, but if you can start with a small amount of funds, you can earn money by using overseas Forex high leverage in a short period of time.

Recently, competition among low-risk companies is intensifying among security companies, even if the spread is narrow, it costs tranding fee. It is meaningless if the system is weak. It is important that the trade system and support system is solid even if spread is somewhat wide.

It is said that trading with high leverage is said to increases the risk, but it is a case where you make a brute deal without considering the balance between your own funds and the volume of trade. If you hold multiple positions with little funds, there is also the possibility that loss will be generated with a little price movement. On the contrary, for those who think of the balance of securely managing positions and self-funds, you can do Forex at low risk.

In overseas Forex, both the range options of leverage and spread broaden. The competence of the trader is tested accordingly. Based on low leverage and spread at the beginning, then change the style of trading flexibly by shifting little by little into high leverage as you become accustomed to trading.

Margin gift campaign now on hold

In the Margin gift campaign held in GEMFOREX, we are holding a margin gift campaign to customers who opened a new account in order to try without risk. You can do tha real trade with the margin that was presented without any deposit. Of course, the worth of profits is possible for withdrawal. By all means, please do try to experience the GEMFOREX.