josejames posted: Garey! It's okay to not take unnecessary risks but still I would say take calculated risks. This would be much beneficial for you.
Yup there is an incredible difference between rash decisions and calculated risks. I started with micro lots in trading through Fxview, with only 100 dollars through the use of leverages I was able to trade many positions. Then I moved to standard lots through XTB which was further beneficial for me.
For me, 1:100 is a good leverage to use. There is no point in risking a big amount that if lost, can pose a heavy burden on your finances. Give it a thought before you take the risk of using high leverage.
I find leverage as a good way of enhancing your profits. But we cannot overlook the fact that it also amplifies your losses. Use leverage only when you are sure about a market move. If it is about testing leverage, you can go up to 1:10 because beyond that would be quite a high risk.
Frankly, I agree with most of the suggestions here. We all know that the chances of making profits in the forex market are equal to that of making losses. Although I have chosen brokers that offer high leverage - fxview, exness, I kind of avoid it. I am saving it for the times when I will be more sure about my moves.
As long as you know what you are doing, leverage is a good thing. But if it goes against you, it can quickly deplete your account. Use leverage only when you are ready for it. Also, never forget to use reasonable stops to avoid a higher loss of capital.
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.
Using higher leverage in a live trade is risky to traders with less or no experience in trading because if trader losses with higher leverage, it is possible for those traders to blow up their accounts.
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.
ADVERTENCIA DE ALTO RIESGO: El comercio de divisas implica un alto nivel de riesgo que puede no ser adecuado para todos los inversores.
El efecto de apalancamiento crea un riesgo adicional y una exposición a las pérdidas. Antes de decidirse a operar con divisas, considere cuidadosamente sus objetivos de inversión, su nivel de experiencia y su tolerancia al riesgo.
Podría perder una parte o la totalidad de su inversión inicial. No invierta dinero que no puede permitirse perder. Infórmese sobre los riesgos asociados al trading de divisas y pida consejo a un asesor financiero o fiscal independiente si tiene alguna duda.
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