Many people think that leverage is insignificant but in fact, leverage can help you to trade safely. When a trader selects more leverage and starts trading, he does not focus on money management and risk management. And puts the whole investment at risk. I always suggest using 1: 500 leverage.
Money management is an integral part of forex trading. If anyone is not having any money management policy, he/she is never gonna be a good trader ever. You need to follow some good and realistic money management system.
I am not a fan of leverages, to tell you the truth. I feel at ease every time I got the loans, so I am not a fan of the bank loans neither. Therefore, attitude increases the psychological pressure on me during the trading, that is why I steer clear from this trading tool.
Choosing leverage also giving impact to the risk; level, some brokers may offer high leverage until 1:1000 or even higher, but choosing high leverage I think useless and even endanger account if leading trader become greedy because high leverage allows the trader to open trades using bigger position due they only need smallest margin requirement.
This is something i learned very fast but also leverage gives the small trader the ability to make decent profits along the way, its all about using risk management and SL on your positions to keep your money safe
Yes, leverage is important in forex business, without leverage maybe retail trader they cant take part in forex trading because to buy 1 lot need real value contract size $100.000, with leverage trader can trade in small portion even start using 0.01 lot size still okay.
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.