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OANDA takes a form of security (or deposit) against any losses that you may incur when you trade using leverage. This collateral is typically referred to as margin. Both margin rates and maximum leverage ratios vary depending upon the instrument traded. It’s worth noting that ASIC found that within the first months of implementing the leverage reduction, there was a 91% reduction in net client losses, from $372 million to $33 million on average per quarter. There were also 51% fewer “loss-making” clients and an 87% reduction in margin close-outs (i.e., liquidations) and negative balances. This attests to the value of choosing a broker with reasonable leverage limits to protect you from volatility and large losses. Australian forex traders can find highly trusted, well-regulated brokers by checking out my guide to the best forex brokers in Australia. |