Forex Dictionary Terms

Maximum Trading Power

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Definition – What does Maximum Trading Power mean?

Maximum trading power refers to the largest possible trade a trader can make given the capital in the account and the amount of leverage available. Simply put, a trader’s maximum trading power is his or her account balance multiplied by the total leverage allowed under the account. Calculating the maximum trading power is more for interest as a trader generally will only use a small fraction of his maximum trading power.

ForexTerms explains Maximum Trading Power

With the leverage offered by some forex accounts, the maximum trading power on even a modest account can be staggering. In practice, however, very few traders ever come close to deploying their maximum trading power because such a highly leveraged could turn and instantly erase the value of the entire account or require a significant injection of capital to cover the margin call.

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