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Low leverage is dangerous, why?
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Member Since Nov 04, 2017  13 posts Adel Grepling (Adelgrepling) Dec 17 2017 at 08:22
togr posted:
JacoAF posted:
Interesting... However, any form of leveraging can be dangerous if you have no clue how to apply proper risk management on your portfolio. High leverage (e.g. more than 200) is very dangerous to NEW traders, who tend to place more trades (because each trade requires less margin). New traders also are less disciplined in using correct stop-loss and take-profit levels, which could result in holding onto multiple high-leveraged losing trades for too long, resulting in blown accounts very quickly.

I think you have a valid point if you are an experienced trader with a solid proven trading system. It makes sense to use high-leveraged accounts when a proven risk management strategy is applied.

But I would not advise any new trader to open a high leverage account (e.g. 1:500) on their first attempt at trading, while they are still very inexperienced in terms of risk and money management, solid technical and fundamental analysis as well as being able to handle the emotional stress associated with trading, especially manual trading.

Anyway, very interesting post indeed! smiley

Well even newbie trader could work with high leverage using fixed stop losses and lets say max XXX trades od size of YYY on account of ZZZ balance. Well ANY even newbie trader should have trading plan including position sizing based on leverage:)

Do you recommend me to work with high leverage?

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