Leverage is an important financial tool which an investor should consider when choosing a broker, it allows an investor to grow his market exposure to a level that exceeds the initial investments. If you want to make profit very rapidly by using high leverage first of all you have to make sure real risk managing plan , otherwise you can fall a great loss despite of sufficient trading balance.
for newcomers suggest to trade with small leverage, because leverage is an important financial tool which always contains risks. So, as a newcomer first of you have to acquire proper risk management policy by trading in demo account in a long time, this approach help you to see the performance how works high leverage.
I have seen many traders think only high leverage can bring profit very rapidly . but practically despite of high leverage that’s not possible at all to make profit very rapidly by using high leverage , if you don’t have a proper risk management plan . so, before trading we have to ensure that with surely.
At the present I am using 1:10 to 1:100 . more leverage become a killer practically. My broker offering high leverage but wisdom is in using appropriate leverage that is manageable for me easily. If I use much leverage it can low my account any time.
I have seen in order to me, Many traders consider leverage as a borrowed of money. But in order to me , it is not a borrowed money but you use your money (capital) as leverage. Meaning you are betting your own money and increase or decrease the stake of risk by increasing or decreasing your leverage. for example if you use 1:100 leverage that mean if you going to incur loses your loses will be 100 times that your actual loses or if you make profit your profit will be 100 times more than the actual profit.
There is a common thinking that the higher the leverage is, the higher the profit would be. As other members have said before me , leverage can lead to losses as quickly as to profits. I think the leverage you choose depends also on the instruments you prefer to trade. For example some instruments are more 'Expensive' ...
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.