Forex Broker Trading with Leverage

The forex markets are not exactly a friendly place to beginners. 

It takes some getting used to. Retail forex accounts are set up in a way that resembles a loaded gun. Handled with respect, everything goes fine, but a little carelessness can lead to major injury.

• The first thing you need to understand is that trading forex involves using forex leverage. 
• The basic concept of trading with leverage, sometimes called trading on margin, is that you can control a large trade on the market with a smaller amount of money in your account. 
• The simple way to explain this is if you have 4:1 leverage and want to open a $100 trade on the live market, you'll only need to put up $25 from your account to make that happen. 
• The unique thing in forex trading is that you cannot lose more than what is in your account, so there is no way to end up with a negative balance. 
• However, that doesn't mean that you can't quickly lose your money, leverage needs to be treated with respect, as I said earlier, it is indeed a loaded gun.