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Originally Posted by Lewis
Yes, Forex is foreign exchange.
Personally I'm doing 200:1 but you can do up to 400:1.
Sorry, don't understand the question about security. 
Are you likely to get 95% positive results at the casino - in which case, I'd go for it!  |
Yes, you are likely to get a 95% positive result at the casino.
Of course, the other 5% of the time you'll lose your house.
At 200:1, you are borrowing 200$ for every 1$ you put in. Which means a drop of 10% in one of your investments would cost you 20 times your "investment".
If you invest 100$ and borrow 20,000$ (200:1) at 7%/annum, then make 25$ over the week, what was your rate of return?
A> 25% per week!
B> [25$ + 26$] / (20,000 + 100) = 0.25% per week
(the 26$ is what was required to pay off the interest, and when you worked out your 25$ profit you included the interest cost)
C> [25$ - 26$] / (20,000 + 100) < 0% per week
(if you didn't factor in your interest payments, deferring them to another time)
D> 7% per year (B's result, which is about 14% per year, minus the 7% per year cost of interest on carrying that debt)
In effect, if I expose myself to enough credit danger, I can turn 1$ into 100$ with nearly 100% certainty over a single week. The trick is the hidden cost of the danger to my credit.
Are your trades done from within a limited liability corperation? Are there any assets within the LLC that are used to leverage your investment with?