E8 Markets Leverage - Why Is It Important?

Get a funded account up to $400,000 with leverage! This is a powerful tool offered by E8 Markets that allows to control a larger position size with relatively little capital. With this option, traders can expand their presence in the markets.

Updated 11-07-2024

How it Works

Leverage in E8 Markets is expressed as a ratio from 1:1 up to 1:50. This ratio indicates the amount of capital you can control for each unit of your own capital.

Traders can trade using leverage, which allows them to take larger positions than their own capital allows. Also known as margin trading, it amplifies both potential gains and losses.

Leverage size at E8 Markets

There are several leverage ratios for different trading instruments:

Forex: 1:50
Indices: 1:25
Metals: 1:25
Energies: 1:25
Crypto: 1:2

For the E8 One account, the leverage is set as follows:

Forex: 1:30
Indices: 1:15
Metals: 1:15
Energies: 1:15
Crypto: 1:1

At E8 emphasise the importance of risk management. We believe that focusing on risk allocation rather than leverage is key to trading success. Traders should prioritise understanding and adhering to the drawdown rules over maximising leverage.

How to Set Leverage While Trading in E8 Markets Match Trader

Step 1: Log In to Your Account. Go to the E8 Markets website and log in using your credentials.

Step 2: Navigate to Match Trader Platform. Once logged in, access the Match Trader platform from the dashboard.

Step 3: Select Your Trading Pair. Choose the currency pair or asset you wish to trade from the list of available options.

Step 4: Open the Trading Interface. Click on the "Create Order" button to open the trading interface for your selected asset.

Step 5: Check the leverage size. In the trading interface, find the leverage setting option. In the "info" section about the asset. For example, you will see that different assets have a leverage of 1:1, 1:2, 1:15, 1:25, 1:30 or 1:50.

Step 6: Place Your Trade

Enter the amount you wish to trade and set other parameters such as stop-loss and take-profit levels.
Review all the details, including the leverage setting, and place your trade.

Step 7: Monitor Your Position. After placing your trade, monitor your position through the Match Trader platform. Ensure that the leverage and other settings are performing as expected.

Additional Tips:

◉ Always be cautious when using high leverage as it increases both potential profits and risks.
◉ Regularly review and adjust your leverage settings based on market conditions and your risk tolerance.
◉ Use of the educational materials and support provided by E8 to enhance your trading strategies.

Choosing the Right Leverage for Your Trading Strategy

Selecting the appropriate leverage ratio depends on your trading strategy, risk tolerance, and market conditions. Consider the following factors:

1

Trading Style: Day traders might prefer higher leverage, while long-term investors may opt for lower leverage.
2

Risk Management: Ensure you have a solid risk management plan to handle potential losses.
3

Market Volatility: Adjust your leverage according to the volatility of the market you are trading.

Real-Life Example

Consider a trader using 1:50 leverage to trade forex pairs:

1

Initial Investment: $1,000
2

Controlled Capital with Leverage: $50,000
3

Trade Position: Buy EUR/USD at 1.2000
4

Price Movement: EUR/USD rises to 1.2050
5

Profit Calculation: (1.2050 - 1.2000) x $50,000 = $250

In this example, the trader makes a $250 profit with a $1,000 investment, thanks to the 1:50 leverage. However, the risk is equally significant. For example price movement: EUR/USD will fall to 1.1950. Then the calculation will be: (1.1950 - 1.2000) x $50,000 = -$250

Best Practices for Leveraged Trading

To maximise the benefits and minimise the risks of leveraged trading, follow these best practices:

1

Educate Yourself: Understand how leverage works and the risks involved.
2

Use Stop-Loss Orders: Protect your capital by setting stop-loss orders to limit potential losses.
3

Diversify Your Trades: Avoid putting all your capital into a single trade.
4

Monitor Your Positions: Keep a close eye on your trades and be ready to adjust your strategy as needed.

Conclusion

At E8 Markets, traders have the potential to boost their profits and enhance their market presence. By understanding the mechanics of using borrowed capital, selecting the appropriate ratio, and adhering to best practices, traders can improve their trading performance. However, it is crucial to be aware of the associated risks and employ effective risk management strategies to safeguard your capital.

Pros and Cons

Advantages
◉ Increased Position Size: Using borrowed funds allows you to take larger positions than you could with your own capital alone.
◉ Higher Profit Potential: Trading with additional funds can significantly amplify your profits compared to using only your own funds.
◉ Capital Efficiency: It allows you to keep more of your capital available for other investments or trades.
Risks
◉ Probability of Losses: Just as profits can be increased, losses can also be increased.
◉ Margin Calls: If your account balance drops below a certain level, you may need to deposit additional funds to maintain your positions.
◉ Increased Volatility: Trading with borrowed capital can lead to higher volatility in your trading account.

By carefully managing these factors, traders can leverage their positions effectively while mitigating potential downsides.

FAQ

What is leverage?

This instrument allows to control larger positions with a smaller amount of capital by borrowing funds from the broker.

What leverage ratios are available in E8 Markets?

E8 Markets offers ratios up to 1:50.

How can I choose the right leverage ratio?

Consider your trading strategy, risk tolerance, and market conditions when selecting a leverage ratio.

How do I start trading in E8 Markets?

Open a trading account, deposit funds, select your leverage ratio, and start placing trades.

Is there a demo account for practising leveraged trading?

Yes, E8 Markets offers a demo account to practise leveraged trading with virtual money.