The most important feature that distinguishes foreign exchange market from other financial markets is the degree of leverage used on it. Degrees of leverage on forex offered by top forex brokers can reach up to 1:200, what is a sky high value compared to stock market. It is possible only because the most popular currency pairs like GBP/USD, USD/JPY or EUR/USD are extremely liquid contrasted to stocks. Trader, who uses a reliable forex broker, can open and close positions on the mentioned pairs immediately at any volume. Leverage seems to be a huge opportunity, since it multiplies your margin, but it is also a fate of many traders. Let’s analyze an example. A beginner trader, who opens a no deposit bonus account, gets a free $100 to trade with. His or hers forex broker gives him an opportunity to set a degree of leverage of 1:100. Then, the trader opens a position of one microlot ($10 000) on the popular GBP/USD pair. It means that the trader opens a position on dollars. But the market is against the trader, dollar losses value and he or she sells the dollars with a loss. The loss in the dollar’s value does not have to be huge, it may change slightly by a bunch of pips. But the leverage multiplies a $3 loss into $300 loss, which is above the margin. In this case, the broker closes the trader’s position automatically. You can be sure, that a regulated forex broker will not use your inexperience to be better off and close the position early enough. This is why any trader needs to gain specific experience and know-how. Forex demo and the wise use of no deposit forex account let you try your skills, before you lose whole equity and discourage yourself from forex trading. The use of leverage is possible on any forex demo as well, therefore it is highly recommended to go through this phase of learning prior to investing real cash.