Best High Leverage Forex Brokers for 2024

Did you know?

Not long ago, the European Securities and Markets Authority imposed leverage caps on the assets that are traded on brokerage platforms within the EU and the United Kingdom. The issue here is that many retail traders cannot afford the large margin requirements needed to support trading under such restricted leverage conditions. If you decide to trade with brokers in the UK and EU, ESMA’s new leverage caps mean that you need to have a margin of 3.33% to trade a major forex pair, as much as 5% to trade a minor forex pair, and as high as 10% to trade stocks CFDs. If you love crypto CFDs, you have to be prepared to come up with at last 50% of the total capital required to setup a position on BTC/USD or any other crypto pair of your choice. The brokers in those regions have already started to feel the pinch as affected traders pull out of their platforms in large numbers. This is where these high leverage forex companies have come to the rescue and provide alternative trading venues for such traders.

The essence of high leverage trading

To understand the impact of high leverage trading, picture this scenario. If you setup a Standard Lot position on EUR/USD, you will need $100,000 capital. With a 3.33% margin requirement on a low leverage broker platform, you will need at least $3,333 to setup this position. But if you were to trade with the high leverage brokers in the list above, using a leverage of 1:500 (i.e. 0.2% margin) means that you would only need $200 to effect the same trade. Same position size, and same size of profit or loss. What a world of difference this makes.

Some of the brokers in this list provide leverage of up to 1:3000. However, a clarification at this point would be in order. The leverage you see listed beside each broker is the maximum leverage available to you as a trader. The leverage provided by these brokers falls into a spectrum which starts at 1:2 and terminates at 1:500, or 1:2000 or 1:3000 as the case may be. This gives you the power to choose leverage amounts you are ok with. If you are more comfortable with using a leverage of 1:200 (i.e. margin of 0.5%) and not the very high leverages (such as 1:3000), by all means work with this. Best high leverage brokerage companies put the power of choice in your hands without having to box you into a corner with very few leverage options.

How to use high leverage correctly

If you take the time to read through the guidelines released by ESMA on the leverage caps, you would notice that the limitation on leverage to 1:30 for forex majors only applies to retail traders. Institutional traders are still allowed to use high leverages; sometimes as high as 1:300. The question is: if high leverage was an entirely bad thing, why was it not scrapped by ESMA entirely? Why are institutional traders allowed to use high leverage whereas retail traders are not?

An explanation for this is that institutional traders usually would have received professional training and proper instruction on position sizing and risk management. The firms they work in also have internal risk control mechanisms that ensure that no trader within the institution goes beyond allowable risk. There is also considerable oversight from team leaders at every level. Furthermore, there is also a great understanding of the concept of volatility, so any leverage used is deployed according to high volatile a market is, with the higher leverages being used to trade low volatility markets.

This goes to show that the real problem here is not leverage in itself, but the propensity of retail traders to abuse leverages and take on too much risk as a result. It is almost a natural thing for traders to want to assume considerable risk, and restricting leverage is not going to cure such innate instincts. Leverage caps will if anything, only serve to push traders to come up with more money to fund such risky trading. Therefore, emphasis on using leverage, whether low or high, should shift totally to ensuring that the traders obey the rules of position sizing and risk management to the letter.

Therefore, in using any of the high leverage brokers listed above, traders must STRICTLY observe the following rules:

• A) High leverage is best left for the low volatility markets. Forex majors tend to have lower trading ranges, lower spreads and have more predictable movements that forex minors or exotic currency pairs. High volatility markets such as stocks and index CFDs should be used with lower leverage. The least leverage of all should be used for cryptocurrencies.
• B) Position sizing must take into account the 3% exposure rule. That is, the total capital of the trader that should be in open trades should not exceed 3% of the account size. If you are using a leverage of 1:100 (1% margin) and you are trading with a $2,000 account, your position size should not exceed $60. If you set up a trade where you hope to make 90 pips and risk 30 pips as the stop loss, then you should trade micro-lots only. Indeed, you should not trade mini-lots on any account that is less than $5000.
• C) Always pay attention to risk-reward ratios. Any trade that involved taking tremendous risk and does not provide a potential profit that is at least three times the risk set as the stop loss should be skipped. In other words, your risk-reward ratio should be at least 1:3.
• D) Never take more than 2 trades simultaneously, and you should ensure that they collectively do not exceed 3% of your account size.
• E) Do not use high leverage for highly volatile markets such as the cryptocurrency and commodity CFD markets such as gold and crude oil.
• F) Remember that using a high leverage broker does not mean you must always use the maximum leverage for all trades. You have to be use leverage responsibly.
• G) Before entering any leveraged trade, write down the reasons behind your decision and compare this with your earlier defined parameters for trade entries. If there is significant deviation from your trade strategy parameters (which should all have been derived from previous testing on demo and a small real account), then you should re-evaluate your decision.

High leverage brokers for you

Above is a list of the best high leverage brokers you can work with. A look at the list will reveal that there are some familiar names on it. Some of these brokers have head offices in the UK or in Cyprus (EU region). In order to compensate for the exit of traders who cannot meet the steep margin requirements on their EU/UK platforms, these brokers have devised a system of automatically migrating affected clients to their offshore branches. This arrangement works well for broker and trader. The broker retains the client, and the client is able to get the same standard of regulation and service provision from the broker, albeit in a new jurisdiction.

Feel free to look at what each of these brokers has on offer, and start trading with a high leverage brokerage today.