Question:How Exness's unlimited Forex leverage works? How to calculate it?
Answer:
How the Unlimited Leverage works on Exness MT4 and MT5
Exness offers the unlimited leverage for all account types except MT5 accounts.
The condition literally offers the unlimited leverage for trading Forex and CFDs, thus the required margin is zero with the condition.
But there are certain rules and limitation that you must know regarding to the unlimited leverage of Exness.
1. Limitation with higher account balances
To avoid too much risk exposure, Exness’s unlimited leverage is offered for account balance with less than 1,000 USD.
The higher the account balance, lower the available maximum leverage on Exness’s accounts.
| Account Balance (Equity) in USD | Maximum Available Leverage |
|---|---|
| 0 – 999 | Unlimited Leverage |
| 1,000 – 2,999 | 1:2000 |
| 3,000 – 9,999 | 1:1000 |
| 10,000 – 19,999 | 1:600 |
| 20,000 – 49,999 | 1:400 |
| 50,000 – 199,999 | 1:200 |
| – 200,000 | 1:100 |
The above conditions is the same for all account types of Exness.
2. For MT5 accounts
Exness provides its traders with both MT4 (MetaTrader4) and MT5 (MetaTrader5) trading platforms.
The unlimited leverage is available only for Exness’s MT4 accounts.
For MT5 accounts, the available maximum leverage is 1:2000.
Also for MT5 accounts, the leverage is limited according to the account balance as specified in the table above.
Open EXNESS MT4 or MT5 Account
3. Important Economic News Releases
High volatility in market prices is the greatest enemy against leveraged trading.
To minimize the risk exposure during volatile market conditions, Exness limits the maximum leverage for any new positions opened from 15 minutes before the the publication of high-level economic news until 5 minutes after.
The leverage limitation affects only new positions opened within that time frame.
Which news and economic events are considered as important?
Contact Exness support team from the official website.
4. Before and After Weekends
All financial markets except Cryptocurrency market close in weekends.
Before and after the market closure on weekends, high volatility in market price is often observed and also price gaps.
To avoid the risk exposure during the period, Exness limits the available maximum leverage for all new positions to 1:200.
The affected time is from Friday at 19:00 GMT (three hours before the forex market closes) to Sunday at 23:00 GMT (two hours after the market opens).
Contact EXNESS Support Team for more
Calculate the required margin with “Calculator”
Exness offers its traders many trading tools for free.
They are all available in the official website and the client area.
One of the tool is the “Calculator” which calculates how much is the margin requirement (and the available maximum leverage) for certain account balances.
Go to Exness official website, and proceed to “Trading” to “Leverage Rules”.
In there, you can calculate the required margin for each account type including Standard, Raw Spread, Pro, Zero, Standard Cent and ECN.
Different Leverage applies for CFD products
Note that the high leverage on Exness MT4 and MT5 are available only for Forex currency pairs.
For CFD products including Indices, Metals and Energies, different leverage will be applied.
For more information about trading conditions of CFD products, please visit EXNESS Official Website.
Contracts for Difference (CFD) trading instruments, object of which is the difference in cost of any particular financial instrument.
It is important to notice, that trader doesn’t become the owner of the equities, but can speculate on the change in their rates.
This type of contracts appeared in Great Britain in the 80th.
CFD trading stocks gave an opportunity for short positions opening and avoiding certain fees. In its turn it increased short positions popularity among speculators.
CFD instruments offers a convenient opportunity to differentiate risks on some trading instruments due to the low margin amount needed for trading.
Contract for difference is for those who want to keep the capital safe in case of the market fall.
It lets to hedge assets, that is why it is popular among stocks owners and investors of different resources.
Contracts for difference are available in the trading platform as well as main currency pairs.
Invest in over 100 markets with Exness today
As Exness’s client, you also have the possibility to invest, with a longer-term outlook, in truly time-tested assets, such as gold and silver, indices, energies and stocks.
With the financial industry ever changing, Exness constantly widens the range of products they offer, improve the performance of Exness’s platforms and enhance the services they provide.
Exness believes that their drive to provide ultimate customer satisfaction, together with Exness’s independence and adherence to the highest standards of integrity is the fundamental key to Exness’s own success.
Exness approachs every transaction as a partnership with the client and look for repeat business and referrals based on results, Exness’s dedication, professionalism and business acumen.
By building long-term relationships with the clients, Exness creates a foundation of trust and a culture designed to promote on-going education and understanding of concepts that have traditionally been perceived as complex and intimidating.
Basic Mechanism of Forex Leverage
The biggest feature of “FX” that has been gaining popularity in recent years, because it can be started from a small amount is that by depositing “margin” to an FX broker, you can leverage it and trade larger amount than the actual fund.
Especially with Exness, the unlimited leverage is one great tool for any types of traders.
However, it is anxious for FX beginners to trade more than their own money from the beginning.
What kind of mechanism is leverage and how should it be utilized in the first place?
In this article, we also introduce what is leverage in the first place, including risks and good use methods.
Aim for larger profit with Leverage
First, let’s talk about the risks of leverage in order to understand what it is.
In the first place, leverage allows you to trade more than your own funds.
By utilizing this leverage, you can trade more than your own funds, so you can aim for a large return accordingly.
For example, if the profit without leverage is 1000 USD, the profit will be 10,000 USD with 10 times leverage.
By leveraging in this way, you can aim for a large return with the same amount of money.
Exness’s leverage works the same, and can increase your trading volume, and in case of Exness, you can utilize the unlimited leverage for Forex trading.
Risk is also multiplied with leverage
Next, you should also know the risks of leverage.
Leverage allows you to trade more than your funds, so when the rate moves in the negative direction it will incur a large loss compared to when you do not leverage.
This is the greatest risk of leverage.
In other words, the profit can be up to 100 times, and the loss can be up to 100 times.
Therefore, you should not ponder how much leverage is suitable for you, and aim for a rich gold with the leverage that is suited for you.
Also, FX has a system called compulsory “Stop Out”, and if the unrealized loss becomes large and the ratio of required margin drops to a certain line, the position you have will be forcibly closed.
In other words, there is a possibility that your account will be settled when you do not want to settle.
To avoid such unexpected losses and forced payments that are different from your own will, you want to manage leverage appropriately.
How to manage risks with leverage
In the previous section, we explained the risk of FX leverage, but if you carefully control the risk, you can avoid the loss due to forced stop out.
So what should be done to control risk with FX well?
First and foremost, it is important not to take too much risk.
Forex beginners are more likely to fall into cases where they accidentally follow a trend and make a profit, so they set large leverage and incur large losses.
To prevent this from happening, it is important to be mindful of the amount of margin you have when applying leverage.
For example, let’s say your margin is 1,000 USD.
So let’s say you trade at a rate of 1.00 USD per EUR.
You can trade 1000 USD without leverage.
If the rate rises to 1.01 USD, it will be a profit of 10 USD, and if it drops to 0.99 USD, a loss of 10 USD.
Next, let’s consider the case where the leverage is multiplied by 50 times.
You can trade for $50,000, and if the rate becomes 1.01 USD, you will get a profit of 500 USD, and if it becomes 0.99 USD, you will lose 500 USD.
Finally, if you trade at 100 times full leverage, you will be able to trade 100,000 USD, if the rate rises by 1 cent you will get a profit of 100,000 USD, if the price lowers 1 cent you will lose 100,000 USD.
In this way, by clarifying the amount of your own money and the plan the profit and loss when you leverage, you can measure how much loss you can endure.
It is possible to prevent unexpected loss by knowing in advance how much the rate fluctuation can withstand when leveraged.
Try to determine your leverage ratio by measuring your own funding and risk tolerance.
How much leverage is appropriate?
It seems that some people think that the leverage is set to “how many times” on the transaction screen, but not all FX brokers can set it.
Leverage can be calculated by “transaction amount (transaction currency amount) / margin”.
In other words, it is not possible to trade 50,000 USD worth of leverage by multiplying 100 USD by 500 times the leverage, but the result is that if you trade 50,000 USD worth of 100 USD, the leverage will be 500 times higher.
Therefore, the leverage must be calculated and set by yourself based on “your transaction volume” and “margin”.
Then, you will know the standard of leverage and how much leverage can be appropriate.
First of all, there is no suitable leverage ratio for everyone.
High leverage is suitable for those who aim for profits even if they take risks, and low leverage is suitable for those who want to make profits with low risk and low returns.
However, there is no standard, when thinking about the leverage setting, the main focus is on “how much the rate will decrease before you lose.”
It will rise someday, but if you leave it overconfident that it must be a temporary decline, it may result in forced loss cuts and may cause unexpectedly large losses, so you should be careful.
Be careful when trading Exotic Currencies
Emerging country currencies are literally the currencies of emerging countries.
The characteristic is that the fluctuation of the rate is large.
Therefore, it is the currency of choice when trading for swaps.
“Mexico peso”, “Turkish lira”, “South African Rand” etc. are well known as typical emerging market currencies.
In case of currency pairs including emerging market currencies, the required margin may be set higher than other currencies.
The reason is that emerging market currencies have few trading participants, there is a possibility that trading will not be completed even if a stop out order is placed, and there is a risk of losing the total margin as a result.
If that happens, the investor will be in a negative (debt) state. To prevent this from happening and to protect investors, some brokers are raising margins to prevent high leverage trading.
Keep in mind that emerging market currencies may require more margin than other currencies.
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