You can not find attractive points of FX, if you do not know leverage. Leverage is "lever". It can be written 梁E��Ein Kanji. Let me show you an example to understand it easily. If a dollar is 100 yen and you buy a million dollar for 1.000.000 yen . In this case, both values reach equilibrium. So lever ratio would be 1. If you buy 2 million dollars for 1.000.0000 yen, In that case, lever ratio would be 2 times. What if you buy 10 million dollars for 1.000.000 yen? It is 10 times.

It is still depending on FX trader.10 times leverage could be possible in even passive trader. In active trader, 100 or 200 times could be possible. However, it is too dangerous to bet such a huge amount at the first time. So you had better start just 10 times.

In the case that you have 1.000.000 yen as funds, and buy $100.000 for 1.000.000 yen, so lever ratio is 10 times. And if 100 yen to a dollar exchange rate change and up to yen110. It would tick up to yen10 per a dollar. Total benefits would be 1.000.000 yen!! Your funds can increase to twice its amount. But, what if the rate decrease to 90 yen? In this case, you would lose 1.000.000 yen. However, as your first funds were 1.000.000 yen, not surprisingly, the game is over.

It was the easiest way to tell about leverage. It is not one on one, but you can sell and buy much currency with few funds. You can make your returns more, and risks as well. It is varied where proper point is, depending on your own trade style.

If a dollar is 100 yen and leverage is 5 times. You can buy $50.000 for 1.000.000 yen. And if 100 yen to the dollar exchange rate increases from 100 yen up to 110 yen, you can gain 500.000 yen. Your funds increase half time. By contraries, if the rate decreases from 100 yen down to 90 yen, you lose 500.000 yen. You still have funds half. It means a game has not been over yet. Be patient just thinking "that timing was just bad", and it can be possible that market rates get back.

It is possible to win the consolation much as long as making up account. Therefore, leverage can be said "drawing a line where the game is over".

Incidentally, if leverage is 100 times and the rate decreases down just 1 yen, it would be over. Instead, if the rate increases up just 1 yen, you can gain 1.000.000 yen by itself. Your funds increase to twice times as quick as a flash.

The lower leverage is. The lower risk and return are made. The higher leverage is. The higher risk and return are made.

It is not about basic theory, but let me advice you as voice of experience. You had better start from 3~6 times leverage first. Having confidence gradually, you can bet with about 10 times. However, it is not recommendable to bet with more than 20 times as long as you have such a great confidence about market rates or are rich at all or can day-trade all the day.

For example, we describe a pair of currency of a dollar and yen as "a dollar/yen" or "a dollar and yen". And, we describe buying a dollar as "overbought position a dollar/yen" or "have position for a dollar/yen". There is other confusing expression here. It is can be said "long position for a dollar/yen".

Additionally, when you sell a dollar and buy yen. It can be said "oversold position for a dollar/yen" or "short position for a dollar/yen". When a dollar/yen is described, it means how worth a dollar is for yen. What about a pound/a dollar? It means how worth a pound is for a dollar.

Incidentally, while Yen is credited to FX account in general. That does not buy currency for only yen. You can take a short position for a dollar/yen. You would think how dollars can be sold. Please note that trader convert them.

Anyway, it is your free choice to start both buy and sell as long as a pair of currency prepared by the trader. If you evaluate now is the time that a dollar decreases, you can sell a dollar and buy yen. That is how it is!!

Yen, which can be all but interest-free and high current dollars rate of interest. There is interest gap between them. If you have 1.000.000 yen, would you just deposit the money to a bank, or would you convert them into dollars and deposit them to a bank in United States? There would be a kind of big difference as to what choice you make. That is "swap" that you can gain some dividends considering the amount of difference.

For example, if you sell yen and buy dollars and have long position for $10.000. You would have 150~155 yen as a daily swap. Daily swap, 150 yen, must be huge. It could be 4500 yen in a month. $10.000, so if you have position for 1.150.000 yen 1.170.000, you would have 4500 yen monthly and 54.000 yen yearly.

Of course, currency gain in current trade - a gap between you buy and you sell - is the best problem. But, you would not be losing if a dollar you bought for 115 yen decreases down to 109 yen sen as you can gain 54.000 yen yearly.

By contraries, when you would like to sell dollars and buy yen, you have to pay 150~155 yen as swap. Because the difference in interest rates is minus, Currency gain is more important than some swap. It is losing, but you would sell dollars, if you think dollars decrease.

It is easy to imagine, a person who bought dollars of plus swap does not lose even he/she is over position. However, a person who sold dollars is apt to try to make up account early. It is a kind of interest factor for trade to have such a psychology.

When you buy currency for foreign travel or sell them as you return to home. There is rate difference. It is said to be TTS or TTP. When you buy them, you are talked into buying for high price. And when you sell them, you are talked into selling at low price. The difference is bank profit. This TTS or TTP is equivalent to FX spread.

For example, in the case of trader, when offer rate for a dollar is 115.54 yen and bid rate for a dollar is 115.50 yen, there is difference of 4 points there. The 4 pints should be 400 yen with a million dollars of buying and selling. So, in the case that you sell quickly the million dollars you bought, you have a loss of 400 yen.

This spread could be different as to trader. Some trader have 2 points, others have 5~6 points. And, there is difference as to currency. For example, if there is trade in pound and yen, there are 7~10 point differences. Therefore, you have better choose trader which have little spread as possible as you can. If you have an eye to just only spread.

Unfortunately, the spread is not only problem, but there are many factors to consider. So it is not that simple.