If you are a forex trader considering one of these ' 400 - 1 leverage ' offers, you should first know:
1. The rules of the game you are about to play.
2. About leverage in Forex and how it works, not for you, but for the broker.
Here is how it works:
Leverage can be beneficial but it can be your worst enemy. 400 - 1 means that US$1000 can control a $400, 000 position say against the Yen. This is great but it also means that even a small move against your position can wipe your account clean. This is obviously very bad news for you but great news for the broker!
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