High leverage , High risk ?

Sep 24, 2017 at 06:27
4,116 Angesehen
100 Replies
Mitglied seit Aug 09, 2017   95 Posts
Sep 24, 2017 at 06:27
By and large traders who are particularly newcomers always fall a great loss due to non-sense planning and zero risk management plan, so before trading with high leverage it is more important to know how to manage risk.
Mitglied seit Feb 12, 2016   427 Posts
Sep 28, 2017 at 07:14
The higher leverage is not the problem, the missing knowledge of the trader is a big problem! You can lose the same way with a low leverage account
Accept the loss as experience
Mitglied seit Feb 22, 2011   4862 Posts
Sep 28, 2017 at 14:43
TiffanyK posted:
The higher leverage is not the problem, the missing knowledge of the trader is a big problem! You can lose the same way with a low leverage account

Exactly.
Moreover for underfunded account of beginner trader leverage is a must. Otherwise he cant trade at all.
Mitglied seit Apr 18, 2017   718 Posts
Sep 28, 2017 at 14:50
Agree with you; without enough knowledge! High trading leverage would be costly! BY the way, knowledgeable traders can use this facility so smartly.
Mitglied seit Nov 03, 2015   9 Posts
Oct 01, 2017 at 06:27
Most traders fail because of using too much leverage.
Short-term price movements are market inefficiencies - take advantage
Mitglied seit Feb 12, 2016   427 Posts
Oct 05, 2017 at 14:34
More like : 'Most traders fail because THEY THINK using too much leverage MEANS MORE PROFIT.' which is absolutely crazy :)
Accept the loss as experience
Mitglied seit Jun 15, 2017   1 Posts
Oct 06, 2017 at 09:59
TiffanyK posted:
The higher leverage is not the problem, the missing knowledge of the trader is a big problem! You can lose the same way with a low leverage account

exact, the merchant's knowledge is a big problem.
Mitglied seit Feb 06, 2017   31 Posts
Oct 06, 2017 at 10:03
i have an account of 1:1000 using $100, so am i safe.

i also need someone to explain the difference and complication of using high leverage
Tomorrow is far away but yesterday is so close.
Mitglied seit Oct 06, 2017   12 Posts
Oct 08, 2017 at 06:18
$100 x 1000 = 100,000 . Could you afford to lose that?
Mitglied seit Feb 22, 2011   4862 Posts
Oct 08, 2017 at 06:21
Wamski posted:
i have an account of 1:1000 using $100, so am i safe.

i also need someone to explain the difference and complication of using high leverage

High leverage has an advantage. It allows you to trade as without leverage with $100 you cant trade at all.
Low leverage is by many understood as account protection as with low leverage your loosing trades are liquidated early.
For experienced users there are many other tools how to protect your equity despite high leverage.
Mitglied seit Feb 06, 2017   31 Posts
Oct 10, 2017 at 06:34
CoolKimOne posted:
$100 x 1000 = 100,000 . Could you afford to lose that?

if i may get you right, the 100,000 , is my trading volume, the amount of money i can use to trade.
Tomorrow is far away but yesterday is so close.
Mitglied seit Feb 06, 2017   31 Posts
Oct 10, 2017 at 06:34
togr posted:
Wamski posted:
i have an account of 1:1000 using $100, so am i safe.

i also need someone to explain the difference and complication of using high leverage

High leverage has an advantage. It allows you to trade as without leverage with $100 you cant trade at all.
Low leverage is by many understood as account protection as with low leverage your loosing trades are liquidated early.
For experienced users there are many other tools how to protect your equity despite high leverage.

please correct me if am wrong, i believe the 'your loosing trades are liquidated early. ' is mainly based on your lot size.
Tomorrow is far away but yesterday is so close.
Mitglied seit Feb 22, 2011   4862 Posts
Oct 10, 2017 at 14:39
Wamski posted:
togr posted:
Wamski posted:
i have an account of 1:1000 using $100, so am i safe.

i also need someone to explain the difference and complication of using high leverage

High leverage has an advantage. It allows you to trade as without leverage with $100 you cant trade at all.
Low leverage is by many understood as account protection as with low leverage your loosing trades are liquidated early.
For experienced users there are many other tools how to protect your equity despite high leverage.

please correct me if am wrong, i believe the 'your loosing trades are liquidated early. ' is mainly based on your lot size.
Lets look into details.
Lets say i trade 0.01 EURUSD on 1,030 EUR account.
0.01 lot represents 1,000 units.
Lets assume marklet moves against you $100 and then moves $100 in positive.

1. Without leverage
So to open such trade I would need 1000 EUR for margin. 30 EUR is left to cover trade negative. If markets move against me $30 and I reach stop out my position will be liquidated early.
2. With 1:2 leverage I would need 500 EUR for margin. 530 EUR is left to cover trade negative.If markets move against me $530 and I reach stop out my position will be liquidated early

So with the same position trade outcome is different.
Mitglied seit Feb 06, 2017   31 Posts
Oct 12, 2017 at 06:45
Oh thanks vontogr 😄 for explaining.

Tomorrow is far away but yesterday is so close.
Mitglied seit Feb 22, 2011   4862 Posts
Oct 12, 2017 at 14:46
Wamski posted:
Oh thanks vontogr 😄 for explaining.


of course the risk could be limited by EAs or stop losses
Mitglied seit Aug 11, 2017   886 Posts
Nov 19, 2017 at 08:22
Many traders consider leverage as a borrowed of money. But in order to me , it is not a borrowed money but you use your money (capital) as leverage. Meaning you are betting your own money and increase or decrease the stake of risk by increasing or decreasing your leverage. for example if you use 1:100 leverage that mean if you going to incur loses your loses will be 100 times that your actual loses or if you make profit your profit will be 100 times more than the actual profit.
Mitglied seit Oct 19, 2017   11 Posts
Nov 21, 2017 at 07:31
You can lose more than your deposit so high leverage is scary
Mitglied seit Aug 11, 2017   886 Posts
Aug 19, 2018 at 08:55
high leverage and minimum margin requirement are an important financial tool which an investor should consider when choosing a broker. but generally high leverage causes a great losses if there is no real money management.  
Mitglied seit Apr 06, 2018   254 Posts
Aug 19, 2018 at 18:53
Mohammadi posted:
high leverage and minimum margin requirement are an important financial tool which an investor should consider when choosing a broker. but generally high leverage causes a great losses if there is no real money management.  
This comment make no sense. First you say high leverage is an important financial tool then you say high leverage can cause great losses. You need clarity of thought before posting.
The market will trade through it’s path of least resistance .
Mitglied seit Apr 06, 2018   254 Posts
Aug 19, 2018 at 19:03
if you are taking 1-2% risk per trade and trading few currency pair you may need leverage of 1:10 only. So most of time you are using only part of leverage that is provided by broker if you use strict money management.
The market will trade through it’s path of least resistance .
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