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High leverage = High risk?
Mitglied seit Oct 29, 2020
47 Posts
Feb 08, 2021 at 08:04
forextrader777 posted:
High leverage attracts new traders but few of them know the actual working of leverage. I would recommend that before pushing yourself into the trades that need margin, try to understand the concept clearly, otherwise it can wipe off your account balance.
Yes, I am taking my sweet time to be thorough with trading concepts.
Mitglied seit Jul 17, 2020
29 Posts
Feb 08, 2021 at 12:35
Steve, even forextime offers it. So does fp markets. These are my ex brokers.
Mitglied seit Sep 18, 2018
11 Posts
Feb 15, 2021 at 10:34
Everyone should use fixed stops, even if it is a safety stop loss wider than normal. All it takes is some political event to shake the markets just after you entered to cause massive price spike. Without a safety SL you could make massive losses
Mitglied seit Nov 24, 2020
14 Posts
Feb 16, 2021 at 10:04
@Eric ideally, you shouldn’t risk more than 1 or 2% of your trade. It also depends upon the trading style of a person and how much they’re willing to risk. For example, I trade with IB and Fxview and my risk management is such that I don’t go beyond risking 2% of it. This helps me maintain a balance and minimises potential losses too.
Mitglied seit Oct 01, 2020
27 Posts
Feb 23, 2021 at 04:54
High leverage doesn’t always mean risk. It is all about knowing what you are doing. If you can manage using high leverage there is no harm in using it.
Mitglied seit Jan 17, 2021
29 Posts
Feb 23, 2021 at 15:19
78678676 posted:
A higher leverage is way too risky, specially for a newbie who can end up getting himself trapped in a bad debt.
Thats is very correct.
Mitglied seit Oct 29, 2020
47 Posts
Feb 24, 2021 at 08:14
robindude posted:
Yes
High leverage = High risk = High chance of wiping out your account/funds
And is there any way of earning decently without using leverage? I doubt it!
Mitglied seit Oct 29, 2020
47 Posts
Feb 24, 2021 at 08:15
78678676 posted:
A higher leverage is way too risky, specially for a newbie who can end up getting himself trapped in a bad debt.
Debt?? I don’t intend to take up a loan for trading, as wrongly (I think) suggested by a friend!
Feb 25, 2021 at 13:56
High leverage is considered risky because when a trader loses in a trade with high leverage, the loss also results in a large amount, whereas if the trader can convert it into a successful trade, the profit earned is more than the invested amount.
Mitglied seit Jul 23, 2020
816 Posts
Feb 25, 2021 at 17:28
New traders should not use high leverage in trading. Traders need to control and minimize the risk for using high leverage.
Mitglied seit Jul 20, 2019
338 Posts
Feb 27, 2021 at 14:25
unsightlydray posted:78678676 posted:
A higher leverage is way too risky, specially for a newbie who can end up getting himself trapped in a bad debt.
Debt?? I don’t intend to take up a loan for trading, as wrongly (I think) suggested by a friend!
Actually "leverage" just means that you'll get a "credit" from a bank or liquidity provider of the broker. A max. account leverage of 1:500 means that you can trade with a maximum of 500k per trade (!) while you'll only throw in 1k of your own money. But if you'll lose 2k in that trade, where does the other 1k come from then? Right, it comes from your deposits (and that's how can get into debt). Most professional brokers have a negative balance stop out. But the higher your leverage the higher the chance you'll get to this stop out.
patience is the key
