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How true is High leverage = High risk?

Nov 12 2020 at 07:22
13 posts
Are high and low leverage two sides of the same coin? I have started fresh in forex and not able to make a right judgment for a good leverage.

Not sure how correct it is to say there are high risks with high leverage.

Recommendations needed from experience holders.

Nov 12 2020 at 07:55
33 posts
Leverage is like a double edged sword so it should be used wisely.

Nov 12 2020 at 08:26
26 posts
Leverage sure is a double-edged sword, but without leverage trading would not bring in any scalable results. That is unless you have heaps of money to invest. How much would a movement of few pips give on 3 or 4k. That also might be considered a big amount for a lot of current investors in the market. Considering most are part-timers, and some even college lads.
Had it not been for leverage, I would have stopped after meagre earnings. Still trading solely because of high leverage.

Nov 12 2020 at 10:57
37 posts
I find it too risky to use leverage. Can’t imagine owing money to the broker and defeat the whole purpose of being in the market.

Nov 12 2020 at 11:38
78 posts
Of course, the best option would be to trade with your own funds, but, unfortunately, not everyone can afford it, so leverage is a very good help.

Nov 12 2020 at 13:01
65 posts
If you use a broker that offers negative balance protection, there’s no way that you’ll be risking owing anything to the broker. Then there’s stop loss as well to the rescue. If I’m not wrong all brokers offer these features, and if yours don’t, simply transfer your funds to a better broker.

Nov 12 2020 at 13:16
13 posts
I do not think that ECN brokers offer negative balance protection. Using high leverage with a stop loss is fine unless the market turns against you massively and you end up millions of $$ in debt

Nov 12 2020 at 16:14
123 posts
I think it is correct to say there is high risk involved when using high leverage.

But of course, trading is risky to some degree no matter what form of trading you do. Whether you trade with or without leverage, it is possible to trade in a smart way, managing risks well, or in a silly way, losing more than necessary.

However, the point of leveraged trading is amplifying your gains, but if you think about it, your losses will be amplified, too. If you don't have experience, experiment in a demo account or cent account first, and avoid doing real leverage trading until you are confident you can be profitable. Make sure to learn how to place orders, especially stop loss orders correctly, and when choosing a broker, be aware of their liquidation policies.

Nov 16 2020 at 04:48
36 posts
I doubt if Robinhood offers negative balance protection

Nov 19 2020 at 18:26
232 posts
Leverage is very profitable for those who have proper knowledge about it. If you don't have any knowledge about leverage you will face a great lose if you use high leverage.

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