Filikunjombe posted: hi every one here, i have my account balance of $200, i want to know the following aspects of risk or management,,,, leverage, lot size, risk reward ratio to be used and amount to lose per trade.
Leverage is basically an investment technique of using borrowed funds to trade. With the help of leverage, you can trade to a much bigger extent, even if your own budget is less. 1:200 leverage means that for every $1 in your account, you can play a trade of $200. This will be provide to you as a loan from the broker. Be cautious with using a leverage as it not only gives you extra funds to trade but also has the power to take you to immense losses.
From my point of view, leverage can be an effective tool for a forex trader only when he will require funds. Otherwise working with levered funds can possess higher trading risks here. But yes, every trader will necessitate proper administration of funds which will allow him to work with his money at the best possible way. I feel that I am better with my own funds rather than working with any leverage.
Mohammadi posted: In my opinion , 1:200 leverage is good for a newbie. Because at these leverage there will be a low risk and average profit that a newbie will be interested to trade in Forex market as well as invest. When a newbie invest in Forex market and have not enough knowledge about leverage , they take high risk . so that leverage is better option to me.
I think the maximum leverage is 1:50 for new people to be safe.
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.
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