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Your preference - what leverage to prove a system and still control risk?
Membre depuis Feb 22, 2011
posts 4573
Feb 13, 2015 at 15:26
ZOOM posted:
Unless he is talking of not taking advantage of the higher leverage to buy more lots.... then again why leverage at all?
It is simple. Higher leverage indirectly increase your relative profit as you can afford to trade bigger trades and make more money with the same capital.
Risk is controlled by other means.
Feb 13, 2015 at 17:08
togr posted:ZOOM posted:
Unless he is talking of not taking advantage of the higher leverage to buy more lots.... then again why leverage at all?
It is simple. Higher leverage indirectly increase your relative profit as you can afford to trade bigger trades and make more money with the same capital.
Risk is controlled by other means.
On the contrary,I feel the higher the leverage,the worse the situation. We should all be working towards low leverage.
Feb 15, 2015 at 09:52
moneycoder posted:
Hi, thanks for peeking at this thread, I need your opinion.
What do you consider reasonable and safe leverage, for a system to employ, that you would consider using and paying for?
My system is nearly set to go cash live, and I'd like to know what you think, is aggressive to maximize time and profit, but still safe?
Thanks for sharing your thoughts.
John
As low leverage as possible. I always consider leverage dangerous. About 1:5
Feb 15, 2015 at 22:00
I agree. High leverage is very dangerous if you don't play it out well. And for that you, especially in the now more volatile market, could prove out very tricky. I tend to think that any leverage at x100 or above is way mind- and account-blowing high.
Feb 16, 2015 at 14:37
Here is an article from the INstitutional Investor about leverage: http://www.institutionalinvestor.com/blogarticle/3426750/blog/investors-financial-leverage-is-your-friend-seriously.html#.VOHr90esVqU
It talks from multi-asset portfolio viewpoint but you can still take in many of the ideas for FX trading.
This here summarises my thought s about the danger of too high leverage
"Rather than never giving in, you often end up capitulating at exactly the costliest point."
It talks from multi-asset portfolio viewpoint but you can still take in many of the ideas for FX trading.
This here summarises my thought s about the danger of too high leverage
"Rather than never giving in, you often end up capitulating at exactly the costliest point."
Membre depuis Feb 22, 2011
posts 4573
Feb 17, 2015 at 08:39
ZOOM posted:
I agree. High leverage is very dangerous if you don't play it out well. And for that you, especially in the now more volatile market, could prove out very tricky. I tend to think that any leverage at x100 or above is way mind- and account-blowing high.
@ZOOM
Nope. Leverage is not dangerous. Leverage determines margin needed to open and hold position.
Without leverage you would need $1150 to buy 0.01 lot of EURUSD.
The risk is something completely different.
Trade size is determined by money management.
Risk is limited by using stop losses or equty protection.
forex_trader_202879
Membre depuis Aug 07, 2014
posts 378
Feb 17, 2015 at 08:43
dty12 posted:togr posted:ZOOM posted:
Unless he is talking of not taking advantage of the higher leverage to buy more lots.... then again why leverage at all?
It is simple. Higher leverage indirectly increase your relative profit as you can afford to trade bigger trades and make more money with the same capital.
Risk is controlled by other means.
On the contrary,I feel the higher the leverage,the worse the situation. We should all be working towards low leverage.
The reality is lower leverage increases the probability that the trader will be willing to hold a position in red. With higher leverage you don't have that luxury thus, forcing you to use high leverage if you are certain that the trade will go your way once you enter.
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