High leverage , High risk ?

One would need big account for risk 1-2% . If I do that i make only cents on a trade. What the point then

LongVision posted:
 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.

Yes, 1-2% is the decent amount; trading with an aggressive trading leverage is always costly. In addition, money management is one of the most important issue here.

Guys, guys... hold your horses.
The leverage used has nothing to do with risk management.
Those are two completely separate things.

You can risk 2% with 1:1 leverage and with 1:500 leverage.

CarlosMZ posted:
Guys, guys... hold your horses.
The leverage used has nothing to do with risk management.
Those are two completely separate things.

You can risk 2% with 1:1 leverage and with 1:500 leverage.

I totally agree with this. Leverage itself is only a tool and has nothing to do with risk. Its your choice how you use it. Limiting leverege for everybody is like banning sharp knives because some people could harm themselves.

CarlosMZ posted:
Guys, guys... hold your horses.
The leverage used has nothing to do with risk management.
Those are two completely separate things.

You can risk 2% with 1:1 leverage and with 1:500 leverage.

if you are unitising 500 leverage you can't

$100 account 500 = 50000
if you open 0.5 lot
spread itself almost 5% and -10 pip is margin call on most broker

It looks like risky but it's not really risky in our understanding. The only difference between leverages is bad to worse differences in losses. Right mindset or sound knowledge is much suitable for right use of leverage, gambling can blew up your account too early.

TeraPips posted:
It looks like risky but it's not really risky in our understanding. The only difference between leverages is bad to worse differences in losses. Right mindset or sound knowledge is much suitable for right use of leverage, gambling can blew up your account too early.

Leverage has nothing to do with money management.
With good money management + high leverage you can have higher profit and the same compared to low leverage

That is so right. People lose money because they don't use money management techniques or use a rubbish strategy. Leverage has nothing to do with it. I could use a 1:1000 leverage account but with proper usage or Lot sizing and stop loss I can safely manage my losses

The bigger the amount of leverage on the capital you apply, the higher the risk that you will get. Note that this risk is not always related to leverage-based margins although it can affect if a trader is not careful.

voketexpert posted:
The bigger the amount of leverage on the capital you apply, the higher the risk that you will get. Note that this risk is not always related to leverage-based margins although it can affect if a trader is not careful.

I have a feeling you mix up 2 kind of leverage
- leverage provided by your broker - the higher the better (though the highest values come from obscure brokers)
- leverage used when trading - yes trading big lots on small deposit is risky. But such risk is not controlled by leverage but by tools like stop loss and equity protecton.

do not trade - no risk.

jnimc posted:
do not trade - no risk.

No risk - No reward. We are here to trade. taking risks is part of that. It is what makes it exciting

this was exactly what I said, mate 😄

It's very important to have good or acceptable risk level, not really wise to get into high risk without good experience.

very true. high risk stuff is purely sepcualtive and should use small Lot size. newbie don't know about that stuff so get problem when trade.

jnimc posted:
do not trade - no risk.

true! no trade no risk, no gain

jnimc posted:
this was exactly what I said, mate 😄

actually do not trade advice is wise
as many traders are losing money
Once I wrote to trash half of your forex deposit to sever and use the second half for your family
Still better than waste it all

TeraPips posted:
It's very important to have good or acceptable risk level, not really wise to get into high risk without good experience.

Yes mate, risk reward ratio is very much important. On the other hand, I see overtrading is one of the most common problem here! By the way, in my trading I never go for more than 2% risk ratio in my per trade.

Higher the risk higher the reward and vice versa.