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Trade Forex without Leverage

Financial leverage attracts a lot of traders to the Forex market. In the simplest terms, leverage is a type of loan issued by a broker secured by the deposit that allows traders to open orders for amounts significantly exceeding the real amount of funds. As a result of this increasing trade volume, a trader could earn or lose more.

The biggest advantage of leverage is that it allows traders to boost their trade sizes. Even leverage as low as 1:10 allows traders with a 100 USD deposit to open a 0.01 lot position. But this also exposes you to higher risk. Keep in mind that forex is characterized by its volatility.

The currency market moves every day by a tiny percentage. As a result of this, the outcome is also in tiny percentages. It will, therefore, be necessary to use more capital to obtain the same returns. That’s why most traders prefer using leverage for their trades. Whatever the case is, the same as a trader could increase his profit using leverage, when the market shows a downward trend the chances of higher loss also exist. Thereby increasing the risk factor associated with the trades.

The main downside of trading Forex without leverage is that it is simply not accessible for most traders. Forex trading without leverage means that changes in the price of an asset directly influence the trader’s bottom line. However, this doesn’t mean that there are no risks involved in trading without leverage.

Risk Warning

 This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. Trust Capital TC Ltd does not take into account your personal investment objectives or financial situation. Trust Capital TC Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast, or other information supplied by an employee of Trust Capital TC Ltd, a third party or otherwise.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83.33% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trust Capital TC does not offer Contracts for Difference to residents of certain jurisdictions including the USA, Iran, and North Korea. Please consider our “Risk Disclosure“.