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High leverage , High risk ?

jamesgwyther
Oct 18 2018 at 08:33
289 príspevkov
Imamul posted:
In Fx trading , leverage is useful for trader , especially if trader start with small balance hence with leverage it will giving opportunity to making transaction on Fx market , now some broker offer high leverage until 1:1000 but so far I am only use leverage 1:400 as maximum.



1:400 is plenty

togr (togr)
Oct 18 2018 at 13:30
4862 príspevkov
RichPort posted:
That is a lot of the problem here. People assume high leverage is high risk and low leverage is lower risk but it is all about how you set up a trade and manage your account. I dumb trader can wipe out an account on low leverage just as easy as high leverage

Exactly.
Closing losing trade is OK. But when this happens too often due to low leverage you wipe the account as well.

KzakSerik
Oct 19 2018 at 05:38
10 príspevkov
1:400 is plenty but 1:50 is too low. I would have preferred to see a limit of at least 1:100 or 1:200 . Can't really do much with 1:50 unless you have thousands of dollars. Yet again the government is oppressing the little guy

AniLorak
Oct 19 2018 at 05:39
920 príspevkov
togr posted:
RichPort posted:
That is a lot of the problem here. People assume high leverage is high risk and low leverage is lower risk but it is all about how you set up a trade and manage your account. I dumb trader can wipe out an account on low leverage just as easy as high leverage

Exactly.
Closing losing trade is OK. But when this happens too often due to low leverage you wipe the account as well.


No way to ignore this issue! But, I see maximum traders are interested to trade with a high trading leverage so, trading with low trading leverage is not common!

B00sted
Oct 24 2018 at 10:19
2 príspevkov
CoolKimOne posted:
$100 x 1000 = 100,000 . Could you afford to lose that?


Please explain more.

Surely if he has an account with $100 and he lost it all that would be it?

Could he have a negative account?

In that instance would or could the broker take the money even if it's not in his account?

togr (togr)
Oct 24 2018 at 14:22
4862 príspevkov
Guys,

you need to separate 2 terms
1. account leverage 1:1 - 1:3000. Even with account of 1:3000 you can trade safely - not overtradings, limiting risk by using SL.
2. used leverage - if you overtrade your positions you will lose regardless the leverage of the account, though on low leverage it will be slower.

Cons - with lower leverage you make less profit, you can't make profit

AniLorak
Oct 29 2018 at 08:11
920 príspevkov
togr posted:
Guys,

you need to separate 2 terms
1. account leverage 1:1 - 1:3000. Even with account of 1:3000 you can trade safely - not overtradings, limiting risk by using SL.
2. used leverage - if you overtrade your positions you will lose regardless the leverage of the account, though on low leverage it will be slower.

Cons - with lower leverage you make less profit, you can't make profit


Exactly, trading with high trading leverage but with a proper money management; is not any worried issue here! If traders follow money management properly, it’s always okay!

pipsKeeper
Nov 08 2018 at 13:21
19 príspevkov
All that was posted before here is really true. I have some question. Why it's more often when brokers suggest beginners to start with a big leverage? The issue is beginner will lose more with the leverage of 1:1000. I suppose that it's better to start with small (1:100 for example).

TeraPips
Nov 09 2018 at 10:52
19 príspevkov
pipsKeeper posted:
All that was posted before here is really true. I have some question. Why it's more often when brokers suggest beginners to start with a big leverage? The issue is beginner will lose more with the leverage of 1:1000. I suppose that it's better to start with small (1:100 for example).


Agree with 1:100 but make sure you have basic knowledge of using it through demo and be aware of your psychology issues which should not interfere trading. You won't want to blow account quickly (with overtrading or revenge trading which is common).

millerwe
Nov 09 2018 at 10:53
14 príspevkov
RichPort posted:
That is a lot of the problem here. People assume high leverage is high risk and low leverage is lower risk but it is all about how you set up a trade and manage your account. I dumb trader can wipe out an account on low leverage just as easy as high leverage

totally agreed. people need to understand how money management works and operates that's the main issue. leverage can result into huge profits if money and risk management are done right.

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