FXCI Leverage Rules: Calculations, Risks, Strategies for Nigeria
Leverage is a crucial factor in trading that can amplify potential profits as well as risks. At FXCI, we offer moderate yet effective leverage levels, ensuring a balance between profitability and safety for our traders.
What is Leverage?
Leverage is a ratio indicating how much your investment is increased by the broker to open a trade. For example, with a leverage of 1:100 and a trading account of $1,000, the broker virtually adds $99,000, allowing the trader to control a position worth $100,000.
The higher the leverage:
- The greater the profit from a favorable price movement.
- But the faster the account will be depleted in case of a losing trade.
Thus, high leverage increases both potential gains and risks.
Leverage at FXCI
At FXCI, we set the following standard leverage levels:
- 1:100 for trading Forex currency pairs
- 1:50 for trading metals, indices, and commodities
These moderate values allow traders to benefit from the effect of leverage while limiting potential losses from high leverage.
The mandatory conditions for using leverage at FXCI are:
- A maximum daily drawdown of no more than 5% of the capital
- A maximum cumulative drawdown of no more than 10% of the deposit
- Closing losing positions upon reaching the margin call level
These risk management rules prevent the complete loss of capital even when using leverage.
Table: Risk Management Strategies When Using Leverage
| Strategy | Description |
| Position Size Control | – Risk no more than 2-5% of the deposit per trade – Calculate volumes based on available capital |
| Setting Stop Losses | – Always use protective Stop Loss orders – Place SL at a safe distance from the entry point |
| Applying Trailing Stops | – Lock in profits using trailing stops – Set the Trail Stop at a reasonable distance from the price |
| Drawdown Limits | – Set the maximum allowable loss for one session – Follow strict rules when reaching this risk level |
| Testing and Optimization | – Test the strategy on a demo account with leverage – Fine-tune entry, risk, and exit parameters before live trading |
Leverage Calculation
To better understand how leverage works, let’s consider a few calculation examples.
Suppose your trading account size is $10,000. With a leverage of 1:100, your margin deposit is multiplied by 100, providing you with a trading resource of $1,000,000.
Table: Margin Calculation for a Standard Lot ($100,000) in Forex at Different Leverage Levels
| Leverage | Margin for 1 Lot |
| 1:20 | $5,000 |
| 1:50 | $2,000 |
| 1:100 | $1,000 |
| 1:200 | $500 |
The higher the leverage, the less margin is required to open the same position.
When calculating profit/loss, keep in mind that they are also scaled by the leverage. For example, a price change of 100 pips on EUR/USD for 1 standard lot:
- With 1:100 leverage = $1,000
- With 1:50 leverage = $500
- With 1:20 leverage = $200
Thus, high leverage proportionally increases not only risks but also potential profits.
Leverage Regulation
FXCI offers extensive options for managing leverage levels for each trader individually. The following settings are available in the personal account and trading terminal:
- Setting Maximum Leverage:
Limit the leverage available to you to a value below the standard maximums. - Fixing Margin Level:
If the margin on the account falls below a specified level, some positions are forcibly closed to reduce the leverage used. - Temporary Leverage Disabling:
Disable the use of borrowed funds with one click and trade only with your own deposit. - Margin Call Notifications:
Set up notifications when approaching critical margin level thresholds.
Frequently Asked Questions (FAQs)
At FXCI, there are no restrictions on the maximum lot size when adhering to risk management rules. With 1:100 leverage, a position of 1 standard lot ($100,000) requires a margin of $1,000.
No, the amount of swaps (rollovers) in Forex does not depend on the level of leverage used. Swaps are calculated based solely on the size of the open position.
Yes, traders can disable the use of leverage in the trading terminal settings and trade only with the full deposit, without resorting to borrowed funds.
At FXCI, we strive to provide the safest and most effective conditions for using leverage. Start with moderate leverage to minimize risks in the early stages of trading.