So using low leverage is forcing you to risk more to get the same profit.
This is wrong. With low leverage you actually not risk but secure more money in your account in case of reaching your broker's stop out level, meaning you will end up having more after your trade is automatically closed.
If you trade 0.1 lot on EURUSD (10,000 EUR) and your broker's stop out is set to 50%, in case of negative price movement, with a leverage of 1:100 (margin required - 100 EUR) you will reach the stop out having 50 EUR left in your account. However, with a leverage of 1:1000 (only 10 EUR required as your margin) you will reach the stop out having 5 EUR. Therefore - with the higher leverage you are losing 10x more, meaning you are putting at stake (risking) 10x more money. It's is that simple. Once again, I am talking about the connection between risk and leverage, not between profit and leverage, as this is the topic of the discussion. It is also true that if you risk more you could earn more. But danger comes with the risk of losing.
An account can be wiped out with any leverage but in normal conditions (no flash crashes or black swan events) the lower the leverage, the slower the account can be wiped out. No wonder why brokers who trade against their clients always recommend using a high leverage focusing on the big profits and ignoring the risk of big losses. They know that when they clients lose, they make a good profit and faster 😄
To make sure my example earlier is clear - we can simply say that we want to invest 10,000 EUR (having in our account enough funds to do it, considering margin calls, spreads, commissions etc.). If you trade these 10K at 1:1 leverage, you risk losing 0.1 USD for every pip of adverse price movement, while if you trade the same 10K at 1:100 leverage, you risk losing 10 USD for every pip of adverse price movement. This means that higher leverage is riskier.@kebayamwamba
Don't get me wrong, I am not against the leverage in general. In fact leverage makes trading accessible to all small investors which is good and you are right that no one forces us to open large trades. I just wanted to explain with an easy to calculate simple example why the statement 'low leverage is more risky' is wrong. I prefer actually trading FX with a leverage of not more than 1:100, risking less.@togr
Your attempt to challenge a common truth deserves admiration and this was a nice and solid attempt. It's also important to present both sides of the coin. Wish you good luck in trading at high leverage as it seems you have the skills to sustain it over long term and are happy with such conditions!