| Forex
vs Real Estate
Please
read the risk disclaimer below. The following example of leverage
is a simplified illustration and has no direct or implied
relationship to the forex market.
Individuals
with risk capital may have considered investing in real estate.
While it is a common investment option, it may not offer the
same degree of return on investment available to those who
trade in the FX market. The leverage afforded in FX allows
for proportional risks and returns.
FX
Market
| 1
Lot** |
$100,000 |
| Leverage* |
100:1 |
| Margin |
$1,000 |
| 1%
Move |
$1,000 |
| Gain:
(1000/1000) |
100% |
*Leverage
is a double-edged sword. Without proper risk mangement, this
high degree of leverage can lead to large gains as well as
losses. Please refer to the Risk Disclaimer at the bottom
of the page for the full disclosure
* *mini lots available ($10,000)
Real
Estate
| 1
Unit |
$100,000 |
| Leverage* |
20% |
| Down
Payment |
$20,000 |
| 1%
Move |
$1000 |
| Gain:
(1000/20000) |
5% |
Trading
foreign currencies is a challenging and potentially profitable
opportunity for investors. However, before deciding to participate
in the Forex market, you should carefully consider your investment
objectives, level of experience and risk appetite. Most importantly,
invest only excess capital and what you are able to risk.
Currency trading involves a high degree of risk and there
are no guarantees that you will make money and there is a
potential for loss.
There is considerable exposure to risk in any equities or
foreign exchange transaction. Any transaction involving currencies
involves risks including, but not limited to, the potential
for changing political and/or economic conditions that may
substantially affect the price or liquidity of a currency.
The leveraged nature of
FX trading means that any market movement will have an equally
proportional effect on your deposited funds. This may work
against you as well as for you. The possibility exists that
you could sustain a total loss of initial margin funds and
be required to deposit additional funds to maintain your position.
Your risk is what is deposited into your trading account.
If you fail to meet any margin call within the time prescribed,
your position will be liquidated and you will be responsible
for any resulting losses. 'stop-loss' or 'limit' orders are
highly recommended with any trades to reduce risk.
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