Need to know the truth

I have been exploring articles and discussions and found that a real ECN broker can’t provide leverage more than 1:100. Is this even correct?

They can but some of them may require you to answer some questions before they make a decision to provide you with 1:200 leverage. The reason is they don't want their traders to lose more than what they have in their accounts and this usually only happens with leverage of more than 1:100. In general your assumption is correct, no good broker will give you 1:300 - 1:500 leverage as your loss doesn't go into their pocket and it is always a hassle to get money from clients to cover their negative balance.

risk is everywhere in Forex its a very common thing , there is no one who can deny but if you have proper money and risk management then within a very short time you can bring good amount of profit from here.  

rgakalo posted:
They can but some of them may require you to answer some questions before they make a decision to provide you with 1:200 leverage. The reason is they don't want their traders to lose more than what they have in their accounts and this usually only happens with leverage of more than 1:100. In general your assumption is correct, no good broker will give you 1:300 - 1:500 leverage as your loss doesn't go into their pocket and it is always a hassle to get money from clients to cover their negative balance.

Wait!! Isn’t negative balance protection provided by the brokers?? I thought that was a given.

AmDiab posted:
risk is everywhere in Forex its a very common thing , there is no one who can deny but if you have proper money and risk management then within a very short time you can bring good amount of profit from here.  

I completely agree!

AmDiab posted:
risk is everywhere in Forex its a very common thing , there is no one who can deny but if you have proper money and risk management then within a very short time you can bring good amount of profit from here.  

Agreed and that’s why 1:3 risk reward ratio is preferred. I also believe trading on leverage is a safe bet. Correct me if I’m wrong.

This you can say is a high leveraged market where you can put down a deposit of $1000 to trade $10,000. Now this is 100:1 leverage factor. What you need to understand here is that 1 pip loss in a 100:1 ratio is $10. So, if you put 10 mini lots in a trade, you’ll lose 50 pips and your loss will be $500 and not $50.

williamhayes posted:

AmDiab posted:
risk is everywhere in Forex its a very common thing , there is no one who can deny but if you have proper money and risk management then within a very short time you can bring good amount of profit from here.  

Agreed and that’s why 1:3 risk reward ratio is preferred. I also believe trading on leverage is a safe bet. Correct me if I’m wrong.

I’d say it’s high risk because high leverage magnifies the potential loss that a trader can make. For instance, you as a trader enter with a $1000 trading capital, but with high leverage, you can have the potential to lose $10,000 trading capital.

williamhayes posted:

AmDiab posted:
risk is everywhere in Forex its a very common thing , there is no one who can deny but if you have proper money and risk management then within a very short time you can bring good amount of profit from here.  

Agreed and that’s why 1:3 risk reward ratio is preferred. I also believe trading on leverage is a safe bet. Correct me if I’m wrong.

Let me try explaining it to you in numbers. I agree with @gareylinn509. If you decide to use hgh leverage, say 50:1, and purchase 5 standard lots, each one pip movement will cost you $50. In case the trader goes against the investor by 50 pips, the investor would end up losing $2500 which will be 25% of the total $10,000 trading account.

ECN brokers can provide you a higher leverage, provided you can qualify as a professional trader.

It is essential to maintain risk in trading. If you can't maintain risk, you can never get good rewards from trading.

jamesmaxwell52 posted:
I have been exploring articles and discussions and found that a real ECN broker can’t provide leverage more than 1:100. Is this even correct?

true that there are rules and regulations that a forex roker need to follow offshore brokers can provide you with extra leverage but it is all risky..

Marshalsam877 posted:

williamhayes posted:

AmDiab posted:
risk is everywhere in Forex its a very common thing , there is no one who can deny but if you have proper money and risk management then within a very short time you can bring good amount of profit from here.  

Agreed and that’s why 1:3 risk reward ratio is preferred. I also believe trading on leverage is a safe bet. Correct me if I’m wrong.

Let me try explaining it to you in numbers. I agree with @gareylinn509. If you decide to use hgh leverage, say 50:1, and purchase 5 standard lots, each one pip movement will cost you $50. In case the trader goes against the investor by 50 pips, the investor would end up losing $2500 which will be 25% of the total $10,000 trading account.

I believe selecting the right leverage is something that entirely depends on the trader’s experience, his comfort while operating currencies, and risk tolerance level. Beginners should however familiarize themselves with the jargons and build some experience in keeping small positions, using trailing stops, and restricting the capital amount for each position.

jamesmaxwell52 posted:
I have been exploring articles and discussions and found that a real ECN broker can’t provide leverage more than 1:100. Is this even correct?

No it isn’t. I mean it does depend on your broker or your country, but real ECN brokers can in fact offer you more than that, even though you don’t have to use that.

78678676 posted:
 ECN brokers can provide you a higher leverage, provided you can qualify as a professional trader.

And what would be the criteria for that?

AliaDare posted:
It is essential to maintain risk in trading. If you can't maintain risk, you can never get good rewards from trading.

I agree, the whole premise of trading is based on risk.

jamesmaxwell52 posted:

rgakalo posted:
They can but some of them may require you to answer some questions before they make a decision to provide you with 1:200 leverage. The reason is they don't want their traders to lose more than what they have in their accounts and this usually only happens with leverage of more than 1:100. In general your assumption is correct, no good broker will give you 1:300 - 1:500 leverage as your loss doesn't go into their pocket and it is always a hassle to get money from clients to cover their negative balance.

Wait!! Isn’t negative balance protection provided by the brokers?? I thought that was a given.

No true broker will give you a negative balance protection. If your broker makes money from commissions and not from being a counter-party for your trades, he can't cover your negative balance as your losses don't go into his pocket.

Do you really want to use this much leverage, even though most of the reliable brokers can offer you leverage ranging from 1:2 to 1:1,000 depending on the investment and requirement of the traders. There are different leverage levels that are ideal for traders with diverse knowledge and experience. So, when you talk to your broker, consider your individual needs and strategy. But, if you’re seriously planning this much leverage, do work on your strategy once.

russellgutierrez posted:
Do you really want to use this much leverage, even though most of the reliable brokers can offer you leverage ranging from 1:2 to 1:1,000 depending on the investment and requirement of the traders. There are different leverage levels that are ideal for traders with diverse knowledge and experience. So, when you talk to your broker, consider your individual needs and strategy. But, if you’re seriously planning this much leverage, do work on your strategy once.

Truly said and what traders don’t understand is that they could make huge profits with it, but if things go downhill, it can take an ugly turn. High leverage only promises additional investment, not profit. There are numerous aspects in trading that actually chalk out whether there’ll be gains or losses. Majority of the novice traders think high leverage will reap profits and make them rich overnight.