High Leverage

QuincyMCQuincy posted:
That is generally true but even stop losses can be blown through in black swan events. The massive move on CHF a few years ago caused a lot of problems for traders and for brokers. Stops were just blown straight through and people couldn't close their positions

I was trading during Swiss black swan event. It is true the positions were not closed at their stop losses and I was trading at 1:500 leverage account. Yet I have survived that event without loss as I traded responsibly. Trade size and money mgmt are other ways to balance your risk. Leverage is not meant to work as your account protection.

smith_fx posted:
Leverage implies the borrowed capital from the broker for investing.
It acts as an additional capital for the investor. Different brokers offer different leverages.

Since leverage allows traders to trade larger positions, the chances of profit are also high .
However , higher the leverage the more the risk involved.
This way, higher the risk, more the profit.

So its better to prefer a higher leverage for the investors keeping in mind the amount of risk associated with the same.
The optimal leverage is 1:100.

False. 1:100 is rarely the exact best leverage. If you’re referring to the maximum set amount of leverage experienced traders can benefit from using more max leverage with each UNRELATED pair using appropriate leverage on account while for an inexperienced trader 1:100 leverage is probably too much and they’ll most likely blow their account shortly. If you’re referring to per-trade it’s also false since your leverage amount should be based upon SL distance and other factors that very between trades. 1:100 leverage per trade for every trade would be completely ridiculous.

AmDiab posted:

momo3HC posted:

apple1st posted:
high leverage only need when you use Martingaile to open more and more orders at all pairs to recovery losses from drawdown. otherwise you dont need leverage if you have really good entry in profit

Don`t think so but everybody`s got his own opinion.

I see; only new traders prefer high leverage! Pro traders always choose small leverage since their own strength is their trading knowledge & experience!

If you called 8 years trader a new trader you may be right. Like I said above everybody`s got his own opinion.

I think retail traders with small capital tend to use high leverage.
For example a pro trader inside a bank or a firm managing millions of dollars would be happy with around 20% annual return and their risk management is totally different so they dont use high leverage or probably they dont use leverage at all.
On the other hand most of us retail traders, we play around with our 1k accounts and for us earning 20%=$200 a year, is not a very good return.
I think as the trading capital grows, it decreases the leverage over time.
Like... i dont really care if i lose $100 on a trade on my 1k account, which is 10%, bcoz i can make it back the next day. But imagine the pain losing 10% on a trade on your 1 million dollar account, which would be losing a hundred thousand dollars on that day. Now that would hurt :)

So i guess reducing leverage comes naturally as your account grows.

Gabor33 posted:
I think retail traders with small capital tend to use high leverage.
For example a pro trader inside a bank or a firm managing millions of dollars would be happy with around 20% annual return and their risk management is totally different so they dont use high leverage or probably they dont use leverage at all.
On the other hand most of us retail traders, we play around with our 1k accounts and for us earning 20%=$200 a year, is not a very good return.
I think as the trading capital grows, it decreases the leverage over time.
Like... i dont really care if i lose $100 on a trade on my 1k account, which is 10%, bcoz i can make it back the next day. But imagine the pain losing 10% on a trade on your 1 million dollar account, which would be losing a hundred thousand dollars on that day. Now that would hurt :)

So i guess reducing leverage comes naturally as your account grows.

I have also noticed this point; whatever, retail traders should follow the rules of money management as well as the risk management so carefully!

leverage is a very complicated issue in Fx trading , sometimes it bring profit very rapidly , sometimes it causes a great losses and risk in spite of having risk management , but after all its one of the major financial issue in Forex.  

Roberto21 posted:
leverage is a very complicated issue in Fx trading , sometimes it bring profit very rapidly , sometimes it causes a great losses and risk in spite of having risk management , but after all its one of the major financial issue in Forex.  

Small trading leverage is the best choice; besides, without following the money management rules, success is impossible!

leverage is a very complicated issue in Fx trading , sometimes it bring profit very rapidly , sometimes it causes a great losses and risk in spite of having risk management , but after all its one of the major financial issue in Forex.  

Roberto21 posted:
leverage is a very complicated issue in Fx trading , sometimes it bring profit very rapidly , sometimes it causes a great losses and risk in spite of having risk management , but after all its one of the major financial issue in Forex.  

Leverage is not any issue.
It is simply tool which allows you to place bigger trades with smaller deposit.
Bigger trades bring bigger profits or losses.
Depending on your trading.

togr posted:

Roberto21 posted:
leverage is a very complicated issue in Fx trading , sometimes it bring profit very rapidly , sometimes it causes a great losses and risk in spite of having risk management , but after all its one of the major financial issue in Forex.  

Leverage is not any issue.
It is simply tool which allows you to place bigger trades with smaller deposit.
Bigger trades bring bigger profits or losses.
Depending on your trading.

You are right; even it’s a complicated issue at all! But I guess; maybe he is changing the leverage features for multiple times!

leverage is a very complicated issue in Fx trading , sometimes it bring profit very rapidly , sometimes it causes a great losses and risk in spite of having risk management , but after all its one of the major financial issue in Forex.  

Without leverage there would be no FX trading. No one can make money with 1:1 leverage. Need at least 1:100 IMHO

blackbridge posted:
Without leverage there would be no FX trading. No one can make money with 1:1 leverage. Need at least 1:100 IMHO

Well without leverage FX would remain domain of the rich

togr posted:

blackbridge posted:
Without leverage there would be no FX trading. No one can make money with 1:1 leverage. Need at least 1:100 IMHO

Well without leverage FX would remain domain of the rich

Even I was; but nowadays so many brokers offering unrealistic leverage; strange!! This is why, new traders lose their balance so easily!

Adribaasmet posted:

togr posted:

blackbridge posted:
Without leverage there would be no FX trading. No one can make money with 1:1 leverage. Need at least 1:100 IMHO

Well without leverage FX would remain domain of the rich

Even I was; but nowadays so many brokers offering unrealistic leverage; strange!! This is why, new traders lose their balance so easily!

High leverage is better for trader with small account because they can trade with small Lot size.

TheGreatRecycler posted:

Adribaasmet posted:

togr posted:

blackbridge posted:
Without leverage there would be no FX trading. No one can make money with 1:1 leverage. Need at least 1:100 IMHO

Well without leverage FX would remain domain of the rich

Even I was; but nowadays so many brokers offering unrealistic leverage; strange!! This is why, new traders lose their balance so easily!

High leverage is better for trader with small account because they can trade with small Lot size.

I don’t think so; because I see, high leverage is more dangerous to the small account holders!

Whatever the trading equity you have; that doesn’t mean much; you have to follow the money management rules; otherwise MC will be very common issue to you!

Adribaasmet posted:

togr posted:

blackbridge posted:
Without leverage there would be no FX trading. No one can make money with 1:1 leverage. Need at least 1:100 IMHO

Well without leverage FX would remain domain of the rich

Even I was; but nowadays so many brokers offering unrealistic leverage; strange!! This is why, new traders lose their balance so easily!

And regulated brokers offers unrealistically low leverage :)

ChristianBeach posted:
Sadly high leverage trading is not possible in US and EU any more. This is real problem for many trader and may end up killing the retail Forex market in these geographies

High leverage trading is still possible worldwide because there are some brokers that offer high leverage and accept member registrations from US, EU and other international members.