While pursuing your trading career with Tickmill, two of the most fundamental concepts for you to grasp are the use of leverage and margin, and how the leverage determines Tickmill margin requirements. It is very common that your broker will keep a portion of your balance to cover the potential loss of a trade. Once you close the position, the margin will be put back into your account.
Quick insights
Exploring Tickmill’s Broker Leverage Options
The use of leverage and margin is one of the main appealing factors about forex trading. Tickmill offers leverage options based on the account type, asset class, and regulatory jurisdiction. Below is the detailed breakdown of the leverage options available for CFDs on Tickmill broker:
Tickmill CFD leverages asset wise
| Asset Class | Maximum Leverage (for retail clients) | Detail |
|---|---|---|
| Forex CFDs | 1:500 | Exact leverage can vary by jurisdiction |
| Indices CFDs | 1:200 | Includes S&P 500, FTSE 100, DAX, etc. |
| Commodity CFDs | 1:200 | Includes Gold (XAU/USD), Crude oil (WTI), etc. |
| Stock CFDs | 1:20 | Lower leverage available for stock CFDs because of their stability. |
| Cryptocurrency CFDs | 1:5 | Lower leverage offered for volatile crypto like Bitcoin (BTC/USD) and Ethereum (ETH/USD) to help manage risk. |
Tickmill CFD leverage account wise
| Account type | Maximum Leverage (based on asset & regulation) | Detail |
|---|---|---|
| Standard account | 1:500 | Higher spreads but suitable for retail traders. |
| Pro account | 1:500 | Offers lower spreads. Designed for experienced traders. |
| VIP account | 1:500 | Offers even lower spreads. More premium conditions apply to professional traders. |
Tickmill leverage and regulatory restrictions
Tickmill’s leverage is largely subject to regulatory restrictions. Under ESMA regulations in European Union, the maximum leverage for retail clients is restricted to 1:30 for major currency pairs and 1:20 for non-major currency pairs. Tickmill avails maximum leverage of 1:20 for commodities and indices too.
Tickmill Dynamic leverage
Dynamic leverage generally refers to a strategy or approach where the level of leverage is adjusted over time, based on market conditions or specific risk factors. Dynamic leverage applies to specific instruments exclusively on the Tickmill Trader and MT5 platforms.
On the Tickmill trader platform, dynamic leverage starts at 1:1000 for specific forex pairs and gold and 1:200 for cryptocurrencies. It then adjusts automatically as your exposure changes. Static leverage applies to all other instruments and to the MT4 platform.
Dynamic leverage is important as it:
- Promotes responsible trading by adjusting leverage according to position size and encouraging careful risk management.
- Protects your account, helping to prevent significant losses by avoiding overly large positions that could lead to a margin call.
- It maintains a specific level of portfolio volatility, meaning the investor might increase leverage during stable periods of the market.
Dynamic strategy is often used in hedge funds, structured products, or by sophisticated investors who want to enhance their risk-return profile over time.
How Tickmill’s Leverage Options Impact Your Trades
As Tickmill’s leverage enables you to trade with a larger amount, you can open bigger positions and potentially earn large profits. However, keep in mind that you are also exposed to a higher risk of larger losses. Leverage impacts your trades in the following ways:
High market exposure
Options to control larger positions with smaller capital increase your buying power. This helps you to amplify your profits when the market moves in your favor. However, you could lose more than your initial investment if the market moves against you.
Risk management
Higher leverage in Tickmill means higher risk. While higher leverage can offer greater profit potential, it can also increase risk. If you are not careful with risk management, the potential for large losses can wipe out your account quickly. If your losses surpass your margin, you may receive a margin call from Tickmill, requiring you to deposit more funds to maintain your profits.
Flexible trading
Tickmill’s leverage allows traders to manage their trades in various ways. When you use a lower leverage, you can afford to take on more positions or hold trades for longer periods. With higher leverage, you may be forced to close positions earlier due to the potential for quick margin depletion.
Impact on different asset classes
Leverage varies based on the assets you are trading. Tickmill offers different leverage for forex, commodities, or indices. Forex typically has higher leverage options, whereas others may offer more limited leverage to align with their volatility and other risk factors.
Impact on trading strategy
For scalpers engaging in quick trades, higher leverage allows them to capitalize on small price movements. However, due to the higher risk, it requires strict risk management. If you are a long-term investor, lower leverage is often safer, as it reduces the chance of a margin call while holding positions over a longer duration.
Regulatory constraints
Like most other brokers, Tickmill adjusts leverage depending on the regulatory environment you are in. For example, leverage is typically capped at 1:30 for the retail forex traders in the European Union, yet higher leverage might be available up to 1:500 in other regions.
Conclusion
Tickmill’s leverage options allow traders to amplify their positions, but they also carry significant risks, especially for those who use high leverage without proper risk management. It is crucial to understand how Tickmill’s leverage affects your trades and choose leverage that aligns with your trading style and risk tolerance.
We recommend traders to always consider starting with lower leverage until you are fully comfortable with the potential consequences.
Pro Tip
It is always essential to use tools like stop-loss and take-profit orders to manage risk, particularly when using high leverage. Use our broker finder tool to select from our trusted forex brokers to enhance your trading experience. Explore more investment opportunities such as investing, banking, finance, crypto, etc.
