How to Change Leverage on MT4 for Different Brokers?
Leverage MT4 is a great tool for those who want to increase the odds of making profits in Forex. Leveraged trading, in general, is intriguing and sometimes complex, especially for novice traders who find it difficult to master. If you are a beginner trader wondering how to change the leverage on the MT4 platform and for different brokerages, we are here to help.
But first, we need to warn you that leverage comes with risk. While it enables you to trade with more significant capital, it can lead to great losses too. The possibility of leveraging MT4 for newbies seems like magic. But it’s absolutely advisable to first learn the ropes of the market before you change your leverage settings to higher levels.
Now, let’s see first as a quick reminder of what leverage is and how you can change it on different platforms. The process is similar with some nuance, though. So, let’s get started.
What is leveraged trading?
Leveraged trading allows traders to invest more than their initial capital. It is a form of trading with more risk and, therefore, the possibility of making bigger profits, if any.
What is leverage in MT4?
In general, leverage represents the borrowed funds that enable greater market exposure.MT4 Leverage in Forex Trading goes up to 1000:1, providing the ability to control up to 1000 USD for every dollar in account equity. Unlike traditional share dealing, leverage in the derivatives market is not a loan from the broker.
The leverage effect makes it possible to multiply an investor’s exposure in a financial market by mobilizing only part of his capital. Thus, with this option and the possibility of increasing the volume of transactions, leverage becomes an effective and fast way to increase the capital invested.
This tool can generate substantial profits if the market is in your favour. On the other hand, if the market goes against your expectations, it can also cause huge losses. In either case, using leverage requires much caution, especially for novice traders.
Depending on the online brokers, the leverage effect that it will be possible to apply will be more or less substantial.
How to change leverage with the broker account?
Your leverage is chosen at the start when you open your account. Depending on the brokers, it is more or less high. You can ask to change by a simple email or sometimes live via setting tabs.
Leverage allows you to open positions larger than the money in play. Opening 1 lot with certain leverage allows you to lower the requested margin.
For example, you want to open a lot on eur/usd worth 100,000 units. You have a leverage of 10; you will only need 10,000 units.
Leverage allows you to free up margin but is misused to burn your account faster.
How to change leverage on the MT4 trading platform
To modify leverage in your M4 account, you must go to the Secure Area of the MT4 account you opened with the broker. Once logged on to the platform, you can manually change the leverage ratio.
There are brokers enabling permanent leverage value. However, they must also enable the option for users to change the leverage.
The leverage ratio you will choose depends on various things like your appetite for the risk, experience level and strategy you apply. In general, seasoned traders opt for higher leverage. Beginners should go for lower leverage levels.
But there is a risk warning! Bear in mind that it’s a double-edged sword since higher leverage can increase the chance for gains but also brings high levels of risk. Hence the need to grasp all the cons and pros of using higher leverage ratios.
Changing leverage MT4 depends on the brokerage you choose
You cannot change the leverage ratio for an existing account already opened with the broker. If you downloaded MT4 directly from their official website for practicing using a demo account, you cannot change the leverage.
You can, however, adapt the necessary leverage on your broker’s portal. There is no one way of doing it. Settings vary from one broker to another.
But they still have similar basic concepts. You can always contact the support via email or other channels of communication to assist you in modifying leverage MT4. Below, we give you several examples of how to change the leverage with different brokers.
How does leverage MT4 change for different brokers?
MT4 Leverage on FPmarkets
You need to find the Navigator tab to modify leverage settings in an FP MARKETS trading account. It’s in your MT4 platform. Then click Accounts. Then click on your account number, where your base currency will appear.
Also, you will see the current leverage level. To modify it, visit your personal account portal, which will lead you to the Secure Client Area. Once you enter credentials, you need to proceed to the Change Leverage tab. Then, you click on the Account number, change the leverage, and submit.
How to change leverage on XM?
XM broker offers a variety of trading instruments. Registered in Cyprus by CySEC, XM provides a user-friendly portal, enabling clients to trade international markets using either a live or a demo trading account.
The platform offers flexible leverage. It goes up to 1000:1. However, this high leverage is only for highly skilled traders with years of trading experience. You don’t want to ruin your account balance during one of your first live trading sessions.
To change leverage in an XM account, you need to log in and go to the section of your trading profile where you can find the “change leverage”. Then select the ratio from the list and submit.
Leverage trading on Libertex.
Libertex represents a well-known and one of the oldest brokers on the market. This brokerage has operated since 1997. Its focus is Forex and CFDs. Based in Cyprus, the company is present in more than 100 countries.
Also, their platform boasts around 2 million users. If you want to trade using leverage with this broker, you need to go to the “Multiplier” part of the site and fill in the data. A maximum limit is allowed: 1:30 for retail clients and up to 1:600 for professional clients.
Leverage and margin call
Besides leverage, position traders often use margin call. Margin refers to the capital invested in a position. It is, therefore, related to the leverage effect. What are the margin requirements?
For example, with an investment of 1000 euros in a position with a leverage of 1:20, you commit to investing 20,000 euros.
The margin here is 1000 euros or 5% of the total. When the leverage is 1:5, the margin is 20%, and when the leverage is 1:2, the margin is 50%.
Leveraged trading simulation in equity market
To better understand how leveraged trading works, we provide an example.
Let’s assume that stock Y has a value of 330 euros. As seen above, the leverage effect of 1:5 gives you a margin of 20%.
Thus, by investing 66 euros and taking into account the leverage effect, your risk exposure is around 330 euros, which represents the price of the Y share.
In other words, by trading with around 66 euros in funds, you will face a risk of around 330 euros. Therefore, by trading CFDs (Contract For Difference), you get 20% of the stock with 5 times the risk exposure. A contract for difference (CFD) is a contract between a buyer and a seller which states that the buyer must pay the seller the difference between the current value of an asset and its value at the time of the contract.
So, following the same example, if you invest 500 euros with a leverage of 1:2, you expose yourself to a risk of 1000 euros.
However, you should know that each asset is assigned a specific leverage effect. The examples mentioned above relate to stocks. For some assets, such as gold, the leverage can reach 1:20 (x20).
Why trade with leverage MT4?
Leveraged trading can provide many benefits. Here are the most important ones.
- Make more profit
Leveraged trading is all about investing a portion of your personal capital.
Depending on the leverage chosen, the rest can be likened to a loan from your online broker. When the market is in your favor, leverage can provide more attractive capital gains.
- Opportunities to diversify
Using leverage increases your investment by exposing yourself to multiple stocks or different assets.
Diversification is a basic principle for any experienced trader. To do this, the use of leverage can be seen as a good option.
Leverage MT4 – Conclusion
Trading is attracting the attention of more and more people, especially private investors. Getting into this business is not the hardest part. On the other hand, making profits requires a minimum of knowledge and a maximum of prudence.
Therefore, before embarking on trading with leverage, you must first understand how it works by focusing on the details since they are very significant. The decision to change your leverage in your trading account must be based on your trading strategy and the previous outcomes of your trades.
The process is straightforward and similar for different platforms. In some cases, you can contact the brokerage and easily change MT4 settings in your trading account with the assistance of support.
Finally, although some brokerages offer a 1:1000 leverage ratio, it doesn’t mean you have to go for it immediately, especially if you are rooky. Remember that leverage is a two-sided sword, so make your decisions wisely.
Leverage MT4 FAQ
What is leverage?
In general, leverage represents the borrowed funds that enable greater market exposure. The leverage effect makes it possible to multiply an investor’s exposure in a financial market by mobilizing only part of his capital.
What is leverage in MT4?
MT4 Leverage in Forex Trading goes up to 200:1 providing the ability to control up to 200 USD for every dollar in account equity. Unlike traditional share dealing, leverage in the derivatives market is not a loan from the broker.
What is leveraged trading?
Leveraged trading allows traders to invest more than their initial capital. It is a form of trading with more risk and, therefore, the possibility of making bigger profits, if any.
How to change leverage with the broker account?
Your leverage is chosen at the start when you open your account. Depending on the brokers, it is more or less high. You can ask to change by a simple email or sometimes live via setting tabs.
Why trade with leverage MT4?
When the market is in your favor, leverage can provide more attractive capital gains.Using leverage increases your investment by exposing yourself to multiple stocks or different assets.
What is leverage in MT4?
In general, leverage represents the borrowed funds that enable greater market exposure.MT4 Leverage in Forex Trading goes up to 200:1 providing the ability to control up to 200 USD for every dollar in account equity. Unlike traditional share dealing, leverage in the derivatives market is not a loan from the broker.
What is a good leverage ratio?
Determining a good leverage ratio is trader dependent. There is no one-size-fits-all, as traders implement different strategies, trading plans, and work with different trading styles
