Leverage

For a small sum of money, I am able to use every exercise equipment that is available at my gym. These are m/c's that work on specific body parts that you want to tone (or bulk up).

Some of them cost a small fortune, and I would definitely not able to buy them all and put them at my home (my wife would definitely see to that)!

This is an example of how I leverage my money in order to be able to use the exercise equipments - paying small amount of money relative to their cost.

In FOREX, we often see brokers touting all sorts of leverage one can get by opening your account with them. Heck, quite a few even go as far as offering 1:400.

To tell you the truth, this sort of leverage does not really interest me. Keep in mind that whatever amount that you cough up to take a trade merely amounts to "deposit."

In other words, you could lose A LOT MORE than the amount (or margin) that you use, if you screw up in your money management plan. This is unlike stocks, where you cannot lose more than the amount of money that you use to trade the security.

Whatever the leverage is, it still comes down to the trader's money management plan.

Unlike the gym metaphor that I use earlier, the biggest leverage that I get from trading FOREX is TIME. I now spend roughly 1-2 hours a day looking at the charts for trading opportunities.

It sure beats working from 8 am to 6 pm anytime!

Now that's leverage in my book!