Leverage is the investment strategy that consists in using borrowed money in the XM broker. To be more specific, it consists in the use of a few financial instruments and borrowed capital just to be able to increase the potential return of any investment.
Another good definition is: “it refers to the amount of debt that is used to finance assets.”
When you learn to use leverage in XM, it means that you can work with more capital that the amount you have in your trading account.
About XM broker
This is one of the uncommon brokers that offers and let you work with both of Meta trader’s platforms, which are MT4 and MT5. It’s a Forex broker that is owned by the trading point of many financial instruments company. Also, this is a broker that is based in Cyprus. Using the leverage in the XM broker means that you are now able to trade some positions larger than the amount of capital in the XM account you are using. The 1:888 leverage that the XM broker offers is unique in the trading market.
It is easy to read and to understand, for example: if you have $1,000 in your XM account and you trade position sizes of 400,000 USD/JPY, your leverage is going to be 400:1.
Also, in the XM broker you can trade about 60 currency pairs and over 100 financial instruments, and better, it can be done through your phone on 8 advanced trading platforms.
One of the benefits of the leverage in XM is that you can make more decisions. For example, you can decide if you want to make an intensification in the leverage you are using or if you want a diminution of it.
The XM leverage is going to depend on the type of your account because you can choose your leverage on a scale from 1:1 to 1:888.
The leverage in XM varies by account classification; it will depend on the account that you choose to work with. For example: if you use a Micro the leverage conditions will be of 1000:1, if you use a standard 400:1, and if you use an executive the leverage conditions are going to be of 300:1.
Now, the margin requirements are not going to change during the week. At XM you can have the option to demand either the increase or the decrease of your chosen leverage.
Even if you are just using a really small investment for the beginning of your work, you still can get some profits, but in the other hand, all your losses can also become drastic if you can’t apply proper risk management.
But, XM is going to provide you a leverage range that offers you the liberty to choose your preferred risk level.
Types of XM account and leverage
- Micro account: is the first level of trading account in XM. This one is ideal for the beginners in this world.
The micro account will offer you 1:500 leverage, XM spreads from 1 pip, and no commissions. It allows 150 maximum simultaneous orders open at any given time.
You don’t risk your money in this account; you can just use it to test your skills and abilities and to absorb knowledge.
Click to learn more Micro Account here
- Standard trading account: it represents the next level, this one is used by seasoned traders. The maximum leverage is 1:400 and the spreads are fixed. This account is going to aloud you maximum simultaneous orders which are 300.
This one requires at least $5 of investment, and, as it was said before, it comes with some profits and excellent facilities.
Click to learn more Standard Account here
- Executive account: it requires a minimum deposit of $100,000 to become activated. This is the most expensive account. This one is for traders with more significant sums of money.
The maximum leverage is 1:300. The spreads are going to vary from 0.2 pips, and the maximum simultaneous open orders are 400.
Click to learn more Zero Account here
Whether you are looking to open an account, through the Micro, standard or executive, Account you will be able to trade at the level you want. It doesn’t matter what your trading strategy or appetite for risk is; here you will find an account to match any of your needs.
The different instruments that are traded through XM broker are:
- Gold and silver
XM Support services
The XM broker offers a 24/5 customer support, you can ask for help on it, they provide you additional information and extra assistance. The support service is available in different languages: Arabic, Bulgarian, Greek, German, Hindi, English, Polish, Spanish, Slovakian, Malay, Korean, Italian and Japanese. When you are trying to understand the leverage, this is essential.
When you use XM, you need to know what are the instruments that XM applies to trade, because that will be useful if you try to understand the leverage.
XM leverage and margin.
It is essential to know the difference between Leverage and margin because sometimes it can be confusing.
The leverage is just the act of taking on debt; meanwhile, if we talk about margin, the right definition will be “a form of debt or borrowed money that is used to make a kind of investment in other financial instruments.”
In XM you can control the used and free margin, you can also control its risk exposing. In XM they try to make a good trader out of you, so they are one of the brokers that will make a margin call; that means that it will make you a call when your maximum risk is surpassing the equity of your account
XM and its leverage are perfect for you if you are starting in this business; remember that it requires time and effort. Try not to make some of the constant mistakes of the trading beginners, like trading in multiple markets. The XM broker has a lot of benefits that will help you in your way to becoming a great trader.