This is an explanatory article on leverage at FBS.
FBS offers a high leverage of up to 3000x.
There are no other forex brokers that offer high leverage of 3000x, but actually there are some conditions to trade with 3000x at FBS.
In this article, I will explain what leverage is for beginners, the maximum leverage and leverage limits of FBS, and how to manage risk with less risk.
- What is the leverage?
- What is the maximum leverage of FBS?
- Leverage limits of FBS
- How to Change Leverage
- What is Leverage?
- Differences in Required Margin due to differences in leverage
- Trading leverage at FBS
- Recommended operation
- How to Change Leverage at FBS
What is Leverage?
Leverage means the principle of leverage.
Using the principle of leverage, you can lift a large stone with a small power.
In the forex world, it refers to a system that allows you to make large trades with a small amount of margin (money).
Leverage is often expressed as “100 times”, “100x” or “1:100”.
In the case of 100 times leverage, it is possible to trade 100 times the amount of margin.
If your margin is $100, you can trade $10,000.
A $100,000 margin allows you to trade $10,000, and a $100,000 margin allows you to trade $10,000,000.
Differences in Required Margin due to differences in leverage
The Required Margin can be calculated using the following formula
Required Margin = Number of lots × Market price ÷ Leverage
Let’s calculate exactly how much the required margin changes with different leverage.
For example, let’s assume the following trade
Currency pair: EURUSD
Number of trades: 1 lot (=100,000 currency)
Market price: 1 EURO = 1.200 USD
100,000 EUR × 1.200 ÷ 1 ＝ 120,000 USD
100,000 EUR × 1.200 ÷ 100 ＝ 1,200 USD
100,000 EUR × 1.200 ÷ 500 ＝ 240 USD
100,000 EUR × 1.200 ÷ 3000＝ 40 USD
Thus, if you take advantage of FBS maximum 3000x leverage, you can trade 100,000 Euros for only $40.
Trading leverage at FBS
The maximum leverage of FBS is 3000x, actually not all products can be traded at 3000x at any given time.
Depends on account type
At FBS, the maximum leverage varies depending on the account type.
As shown below, the maximum leverage is 3000x for Micro, Standard and Zero Spread accounts.
The maximum leverage for cent accounts is 1000x and 500x for ECN accounts.
|Account Type||Max leverage|
Restricted by account balance
The maximum leverage of FBS depends on your account balance.
As you can see from the table below, you can actually trade with a high leverage of 3000x up to an account balance of $200.
However, if you trade with a margin balance of $200 and a high leverage of 3000x, you will lose money instantly if the price goes against you. You may think that it is not worth it.
|Account Balance||Max Leverage|
Depends on the trading instrument
FBS is very popular among traders because it offers a wide variety of stocks to trade, especially individual stocks.
In fact, only currency pairs can be traded at FBS with up to 3000x leverage.
For CFDs on stock indices, energy, gold, etc., the maximum leverage is lower. Even within the same product, the leverage varies by symbol.
Individual stocks can be traded with a leverage of 100x, which is higher than that of other forex brokers.
All of FBS products and the maximum leverage that can be traded with each of them are explained in detail in the separate article “FBS All Products and Trading Conditions | Forex and CFDs“. Please take a look.
Especially in the world of forex, people focus on the high leverage, but the higher leverage is not the better.
Leverage is a double-edged sword.
If you trade a product with high volatility with full leverage, a small price reversal will result in an immediate loss.
This is not a recommendation, but rather a principle of leveraged trading.
- Follow strictly the money management rules
- Understand the margin requirements and the amount per pips
- Adjust the number of lots and leverage
When you increase the leverage, the amount of fluctuation per pips becomes larger.
It is necessary to decide beforehand how much you can bear in case the price moves against your expectations. After properly planning your trading strategy, prepare sufficient funds and decide on the number of lots to order.
At this time, you can also change the leverage in advance to reduce the risk of loss cutting in case of unexpected price movements.
This means that rather than operating with 1000 times leverage, you can reduce the risk to one tenth by using 100 times leverage.
How to Change Leverage at FBS
The leverage of FBS can be changed for each account.
You can change the leverage for each account, so you can create additional accounts, change the instruments for each account, and reduce the leverage for the account with the highest volatility to reduce the risk.
You can change the leverage of FBS by following the steps below.
Login to member page
Login to FBS member page from the top page of FBS official site.
Select target account
From the list of accounts in the dashboard, click on the account for which you want to change the leverage.
The Account Settings screen will appear, and click on Leverage.
Select the leverage you want to change, and click Confirm.
In this example, I will change it to 100x.
The change in leverage will be reflected immediately.
For more information on how to create an additional account at FBS and how to operate with less risk by utilizing multiple accounts, please refer to the separate article “How to Open FBS Additional Account | How to Reduce Risks“.
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At FBS, not all products can be traded with 3000x leverage.
It is also possible to take advantage of the characteristics of leverage to make larger profits or trade with less risk.
Please make sure you understand leverage and use the leverage changing function to manage your trading safely.
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