The Number 1 Cause of Death of Forex Traders

Just because brokers allow you to open an account with only 25 USD doesn't mean you should. That is, unless you want to fail.

Lessons on The Number 1 Cause of Death of Forex Traders

1. Leverage the Killer

   What exactly is leverage and how does it work? Make sure you get this concept down pat so you don't get any surprises!

2. Leverage and Margin Defined

   What is the difference between leverage and margin? You don't want to confuse those two terms and wreck your account.

3. Margin Call Exemplified

   Everyone fears the dreaded margin call. What does this mean and what happens after you get it? Read on to find out!

4. Margin + Leverage = Possible Deadly Combination

   Make sure you fully understand how margin and leverage work in order to avoid getting a margin call. Here's how you can do that:

5. Negative Effects of Leverage

   Check out this concrete example of a trader whose account got blown by the negative effects of leverage.

6. More on Leverage

   The more leverage you use, the less breathing room you have for the market to move before you get a margin call. Here's an example to illustrate.

7. How Leverage Affects Transaction Costs

   Not only does leverage amplify your losses, it also amplifies your transaction costs as a percentage of your account. Check out this illustration.

8. Don't Underestimate Leverage

   Understand when to take advantage of leverage and when it can damage your account. Here are some things to take note of.

Forex Training in the School of Pipsology