About leverage and swaps

1, Leverage

FX is characterized by the ability to trade by simply depositing a margin that corresponds to only a portion of the trading amount,

this is called the leverage effect.

For example, when 1 USD = 100 JPY and you want to buy 1,000 USD,

you would normally need 100,000 yen. you can trade from amounts as small as 1/25 of that value. (for domestic accounts)

In other words, you can buy 1,000 USD starting from 4,000 yen.

Notes when trading with leverage

• Deposit more margin
• There is a risk of forced liquidation
• Be careful not to hold too many positions
  
  
  

2, Swap

If you buy the currency with the higher interest rate, you can earn a swap,

and conversely, if you sell the currency with the higher interest rate, you pay a swap.

In simple terms,it is the difference in interest rates between the two countries.

If you hold a long position, it is a receive (income).

If you hold a short position, the swap is a payment.

Be careful of negative swaps

Swap points do not always guarantee profit.
If you sell high-yield currencies such as Turkish lira/yen or Mexican peso/yen,
and buy low-yield currencies such as the Japanese yen,you must pay the interest rate differential in the opposite direction.This is called a negative swap. The longer you hold, the larger the amount you pay, so be sure to be cautious of negative swaps.