What trade size and leverage to use in forex?

inspirenez posted:
First make a strong trading plan, of which leverage should not be a part. If you can’t make profits without leverage then you shouldn’t be trading at all.

I believe leverage is used so that the percentage of profits increases, it does not mean that one does not know how to trade.

Kylealker87 posted:

inspirenez posted:
First make a strong trading plan, of which leverage should not be a part. If you can’t make profits without leverage then you shouldn’t be trading at all.

I believe leverage is used so that the percentage of profits increases, it does not mean that one does not know how to trade.

I sort of agree with you, leverage is required, but just should be used very carefully, after acquiring some experience.

What are you guys talking about? Leverage allows you to make the margin bigger. If you follow proper position sizing, you would have the exact same amount of risk every single trade. You only need 2 things: capital amount you are willing to risk and total pips from entry to stoploss. Using those two, you can get the correct lot size. Whatever happens to the trade, you will lose the exact same amount of capital regardless of what leverage you have on the account. Leverage matters only when you have a lot of trades open as it will allow you to open more due to bigger margin.

If you follow correct position sizing and risking 1 to 2% of your capital every single trade, leverage is not needed on this equation.

irkedduff posted:

Kylealker87 posted:

inspirenez posted:
First make a strong trading plan, of which leverage should not be a part. If you can’t make profits without leverage then you shouldn’t be trading at all.

I believe leverage is used so that the percentage of profits increases, it does not mean that one does not know how to trade.

I sort of agree with you, leverage is required, but just should be used very carefully, after acquiring some experience.

Yes. Leverage can be a very dangerous tool in a trader’s kit. Experience is necessary to know how to use it profitably and not turn it into a money-losing mechanism. I started trading with xm and icm first without any leverage. Only after I started making some profits, few dollars on first 1000k, I started using leverage. As of today I am using leverage with all of my brokers: ig, forex.com etc. However I still trade using only micro lots.

Practice enough on a demo account first.

Mikehussey posted:
Practice enough on a demo account first.

Yes, there’s no other way of finding out how you should be trading. A demo account will tell you if your strategy is right, or if you need to make any changes.

Start with a micro account. It’s the next logical step after demo trading.

@Collingwood112 Even I started with a demo account of plus500 and then when I went live with fxview, I invested $100 and made my first trade. Eventually I raised my capital amount and it’s been all good.

You can trade whichever lot you want, just remember to keep leverage at bay. That way you will keep yourself safe in the long run.

asidefellow posted:
You can trade whichever lot you want, just remember to keep leverage at bay. That way you will keep yourself safe in the long run.

Care to explain how?

@Fafduplesis It's simple really. When you suffer a loss while using high leverge, the loss in the trade would be totalled according to the leverage ratio. If the leverage is very high the trader would take high risk. For example a trader took 50 times the real leverage on his 10,000 dollars capital, the trader would short/long 5 lots of the currency.

Leverages can be a great tool but then with the good things comes the risk; which is substantially high. If you win the trade you reap good profits.

The leverages and trade size can also be calculated through trade calculators. I have been using Fxview's Fibonacci retracements from the charts through the extreme points. This helps me verify strategies which I can then also apply to my Instaforex account to find the retractments. Fibonacci retracements is bomb!

Leverages and trade size should be decided on the confidence and real risk taking capacity.

I think before going to the standard lot directly, a trader should trade micro lots. This will give him a real experience because in demo, the emotional response is quite different from the real one subconsciously.

tracepharikson55 posted:
@Collingwood112 Even I started with a demo account of plus500 and then when I went live with fxview, I invested $100 and made my first trade. Eventually I raised my capital amount and it’s been all good.

I also benefited from the demo account. Got a good idea of how the price action develops and the inherent risks of leverage along with the idea of correlations between the currency pairs, also how market hours and assets change the volatility.

asidefellow posted:

tracepharikson55 posted:
@Collingwood112 Even I started with a demo account of plus500 and then when I went live with fxview, I invested $100 and made my first trade. Eventually I raised my capital amount and it’s been all good.

I also benefited from the demo account. Got a good idea of how the price action develops and the inherent risks of leverage along with the idea of correlations between the currency pairs, also how market hours and assets change the volatility.

Let’s not forget the chart figures and support and resistance lines. I made a demo account with FXview and Pepperstone and understood in detail how to configure different charts for technical analysis and the margin used depending on the leverage.

tacosgild posted:

asidefellow posted:

tracepharikson55 posted:
@Collingwood112 Even I started with a demo account of plus500 and then when I went live with fxview, I invested $100 and made my first trade. Eventually I raised my capital amount and it’s been all good.

I also benefited from the demo account. Got a good idea of how the price action develops and the inherent risks of leverage along with the idea of correlations between the currency pairs, also how market hours and assets change the volatility.

Let’s not forget the chart figures and support and resistance lines. I made a demo account with FXview and Pepperstone and understood in detail how to configure different charts for technical analysis and the margin used depending on the leverage.

I am about to open a live account and have been wondering if I can make some money out of it.