Even though a lower leverage requires more funds for placing trades over the market, it will also lower the risk you are facing. Please consider carefully your experience and risk appetite when choosing your leverage. Leverage has several disadvantages, but it should not deter traders from using it or trading leverage. On the contrary, leverage is generally considered a good thing, and in foreign exchange markets, where it compensates for lack of volatility, it is crucial to allow quick returns. Furthermore, increasing the amount of money you can earn per transaction increases the efficiency of the way your capital is used. So let’s get a bit more technical here; think of your capital to deliver a return.

By setting maximum leverage ratios and position sizes, traders can avoid taking on too much risk and maintain control over their trading activities. Here is a chart that illustrates how price movement in terms of pips is relative to the 3 basic sizes of trade positions. Your portfolio and any live forex positions may become liquidated if you don’t have enough margin because you’re trading at the limits of leverage. Your broker is subject to the financial authorities’ rules where it’s based. Still, the broker might alter its leverage and margin requirements further depending on how volatile a currency pair is.

How are leverage and margin related?

These include major pairs like EUR/USD and GBP/USD, known for their high liquidity and tighter spreads. Minor pairs, such as EUR/GBP and AUD/CAD, provide additional trading opportunities with slightly wider spreads. For those interested in less conventional markets, exotic pairs like USD/TRY and EUR/ZAR are also available. LunarCapital offers an extensive selection of tradable instruments, providing traders with the flexibility to diversify their portfolios across multiple markets.

Deposits and Withdrawals

Effective risk management extends beyond merely setting stop-loss orders; it entails comprehending the probabilities of different outcomes and adjusting your position sizes accordingly. By integrating risk-reward ratios into your trading strategy, you can ensure that the potential reward justifies the risk assumed in each trade. LunarCapital is an award-winning forex and CFD broker that offers zero-commission investing to clients around the globe. This 2025 broker review will explore the firm’s primary features, such as regulation, account types, leverage rates and customer support options. Read on to discover whether you should sign up for an LunarCapital account today.

While LunarCapital is a reputable company and broker, regulation from CySEC does not offer the protection and assurance that a regulator like the FCA does. The broker also levies an inactivity fee on accounts that sit dormant for over 120 days. This charge is $/£5 per month, effective after the qualifying period but it does not apply to accounts with a zero balance. LunarCapital also offers a swap-free account variant for clients that cannot pay overnight interest charges due to their religious beliefs. However, equivalent costs are taken in the form of account management fees. Leverage and margin are two interrelated concepts that you should understand if you want to take forex trading seriously.

Trading Platforms

Many have enjoyed gains on high leveraged trades, but most of these are carefully thought out trades. Newbie traders who are attracted to using leverage and margin can easily make a mistake in thinking that profitability in forex trading means that every trade has to be a highly leveraged trade. This is perhaps one of the fastest ways by which beginner forex traders can be wiped out of the forex trading arena. The LunarCapital Trader Mobile Platform offers traders full access to all trading instruments and tools without the need for any downloads. Accessible through any browser, it provides a seamless trading experience regardless of the operating system you’re using.

Customer Support

LunarCapital is committed to implementing industry-standard security practices to ensure a reliable and trustworthy trading environment. These robust safety measures highlight the broker’s dedication to safeguarding its users, making LunarCapital a secure choice for traders who prioritize the safety of their trading activities and personal information. In this LunarCapital review, we examine the broker across key categories, including its accounts and fees, trading platforms, and customer support, to find out how it competes with alternatives.

Even minor price differences and small movements can result in gains if you apply leverage power with care and skill. If the leverage weren’t available, then you’d only be trading the 100, making it harder to squeeze profits out of the market. Your broker will then instruct you to increase the capital in your account and recommend what the leverage limits are on the transaction you want to make. If the leverage level isn’t available or you don’t have enough available margin left in your account, then the trade won’t get executed. Other traders thrive on the opportunity to use leverage because they have so much confidence in their overall strategy.

Effective risk management is essential when trading with leverage and margin. Traders should set clear risk limits, such as stop-loss orders, to protect their capital from excessive losses. When a trader’s account balance dips below the specified margin threshold, it triggers what’s known as a margin call. In such cases, the broker may demand additional funds to bring the account back to the required level.

• FX Central Clearing Ltd, or LunarCapital, has operated in the forex and CFD investing space for over ten years.
• Clients that prefer to talk to an authentic voice can phone the support contact number, which is free for UK based clients.
• I like how tight spreads they provide on the forex market and the spreads are even more tighter than from other major and famous brokers.
• Traders leverage their buying power by borrowing money from a broker to trade more significant positions in a currency.

• LunarCapital has earned a good score for its fees due to the tight ECN spreads combined with no commissions, an unusual pricing model that places this brand among the cheapest forex brokers we have reviewed.
• When trading with margin and using leverage, the amount of margin required to hold open a position or positions is determined by the trade size.
• LunarCapital’s live chat feature offers instant access to customer support, allowing traders to receive real-time assistance directly from the trading platform.
• That said, the bonus could not be withdrawn, and if your account balance reaches below 50% of the available bonus credit, the amount will be removed.

The required amount for margin is usually determined by calculating for the percentage of the size of notional trade plus a small amount that represents cushion. This cushion amount is usually placed on top of the value to account for possible fluctuations that can occur on a regular basis. In addition to an FAQ section on its website, LunarCapital operates a responsive live chat service that runs alongside the forex markets 24/5 and a support email address for more complex issues. Clients that prefer to talk to an authentic voice can phone the support contact number, which is free for UK based clients.

Forex

As payment options vary from country to country, we suggest creating a free account on LunarCapital.com to see which options are available to you. We offer impartial reviews of online brokers that are hand-written, edited and fact-checked by our research team, which spends thousands of hours each year assessing trading platforms. They dont have their own cooked up half-working trade platform, instead its tried and tested MT4 which is the best trading platform for retail by far. However, not all currency pairs are as generously priced – GBP/USD trades with a 1-pip spread, which is more expensive than the average of around 0.3 pips at Fusion Markets, for example.

The primary advantage of leverage is the ability to amplify potential profits. By controlling larger positions with less capital, traders can potentially earn more from favorable market movements than they could with their own funds alone. Margin is best understood as a good faith deposit on behalf of a trader, a trader puts up collateral in terms of credit in their account. In order to hold open a position (or positions) in the market place, margin is a requirement because most forex brokers do not offer credit.

How to determine the maximum limit to which an account size can handle relative to the available leverage provided by a broker. Once you take the leverage on offer from your broker, you must meet the obligation of this liability. Whether the transaction wins or loses, you must pay for the principal amount. Leverage can help you to squeeze profits out of FX trading when volatility is low.

If the forex markets fluctuated and moved in similar patterns as the equity markets, then forex brokers could not offer such high leverage, as this would expose them to unacceptable risk levels. You must satisfy margin conditions before you get provided with leverage. The broker may enact a margin call if you don’t ensure enough capital is in your account to keep your trades live and meet the leverage requirements. The amount of leverage you use depends on your preferred trading style and how aggressive your trading is.

Seasonal promotions are time-limited, encouraging traders to engage actively and take advantage of the enhanced offers. LunarCapital works very well for intermediate and https://lunarcapital.net/ advanced forex day traders seeking high leverage and tight spreads from a ‘frill-free’ broker. LunarCapital enhances the mobile trading experience by offering the MT4 and MT5 applications, compatible with iPhone, iPad, and Android devices, ideally suited for day traders. Traders must be cautious when using leverage and implement risk management strategies to protect their capital.

Forex traders, in effect, are borrowing a certain amount in leverage to cover the rest of the trading capital required to trade certain lots. The forex broker takes care of the leverage while the forex trader is left to put up his share in margin. Although the leverage and margin do not influence the profitability of the trade, they do magnify the amount of gains or losses a forex trader experiences in his trades. Forex trading is a cornerstone of LunarCapital’s offerings, featuring a comprehensive selection of currency pairs for traders to explore.