There’s a very high volume and high liquidity in the Forex market. This draws many banks, investment houses and brokers into the market, thus creating competition.
And, since there’s a high volume, open positions can be closed at almost any market condition. Trading agencies can offer their customers very high leverages, something that is uncommon in other financial markets, such as the stock market.
The leverage ratio can sometimes surpass 200. Guarantees of $10,000 can be sufficient for a deal of $2,000,000.Most traders usually use a leverage of 100. A common deal would be of $100,000 which would demand guarantees of $1000 – not too much cash for a normal investor.
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