ECN with 300 leverage

I would like to know why an ECN can not propose a leverage of 300 to clients??

Thanks,
Booby

Hi Booby, because think of it like this:

you have $100K deposited as margin and receive 300:1 leverage so that means you can have a position up to $30mio.

If you opened a positons of 30m USDCAD, the pip value is $3000 CAD per pip.

So that means if you lose roughly 33 pips, your whole deposit is wiped out, and if the market gaps or moves quickly, the broker may not be able to close your positions in time, and may lose money themself.

Plus anyone offering you that kind of leverage is generally a rip off broker who is bankiong on you losing all your money anyway.

Hope that helps...

I trade with leverage of 500 with FXOpen ECN

I haven't been with them that long but I have not noticed any problems.

Actually, for me they are good. Be warned though, your leverage drops with a balance above 20000 so you have to keep withdrawing your money.