Lesson 3. What Is Multiplier?
A Multiplier is one of the major tools in Libertex. It allows you to increase your trade's profit potential.
How does it work? It’s Very simple.
Let's assume you buy EUR/USD, your investment amount is $50, and your multiplier is one. If the price goes up 10%, your profit will be $5 ($50 x 10%).
However if instead of one you specify 20 as a multiplier your investment amount will rise to $1,000 ($50x20).
As you can see, your profit has been multiplied by 20, and this is how the multiplier works.
This is like the speed of a car: the greater it is, the faster you reach your destination. However, high speed brings with it more risk. This is why every car driver chooses a speed which is good for themselves depending on their experience, road surface condition and the traffic code.
For novice traders, we recommend using a minimum multiplier, which equals 1, in order to avoid risks in case the market moves against you.
As you acquire skills and experience, you can also increase your multiplier.
Continue to the next lesson to learn how to effectively manage your risks using the Stop Loss order.