1:200 leverage

Mar 12, 2019 at 09:32
4,911 Zobrazení
76 Replies
Členom od Aug 11, 2017   886 príspevkov
Mar 12, 2019 at 09:32
In my opinion , 1:200 leverage is good for a newbie. Because at these leverage there will be a low risk and average profit that a newbie will be interested to trade in Forex market as well as invest. When a newbie invest in Forex market and have not enough knowledge about leverage , they take high risk . so that leverage is better option to me.
Členom od Mar 12, 2019   8 príspevkov
Mar 12, 2019 at 10:52
I use 1:200 . I like this leverage. It is high enough to give gains but not crazy high like 1:1000. But it all depends on how you manage the leverage. A bad trader can lose it all with 1:10 leverage or 1:1000!
Členom od Mar 06, 2019   7 príspevkov
Mar 13, 2019 at 13:15
AdebayoTheBest posted:
I use 1:200 . I like this leverage. It is high enough to give gains but not crazy high like 1:1000. But it all depends on how you manage the leverage. A bad trader can lose it all with 1:10 leverage or 1:1000!
i agree. i don't think there is any good leverage ratio, just depends on the trader how he/she manages and uses it.
Členom od Aug 11, 2017   886 príspevkov
May 23, 2019 at 08:34
In Fx trading , by and large traders in particularly the newcomers fall a great loss by taking high leverage due to non sense planning and zero risk management policy, nothing to do with high leverage at all. so, I think, before trading with high leverage we have to know how to manage risk.
Členom od Aug 09, 2017   785 príspevkov
May 23, 2019 at 09:23
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.  
Členom od Apr 30, 2019   10 príspevkov
May 23, 2019 at 09:58
The harm and benefit of leverage all depends on how you manage it. I have used 1:1000 leverage quite happily because I have managed my positions well. But other trade may loose all money on 1:200 or lower
Členom od Feb 22, 2011   4862 príspevkov
May 23, 2019 at 10:10
Risk is always based on your risk mgmt.
Even if the account leverage of 1:1000 you can trade just 0.01 lot per 1000 deposit.
So again leverage has nothing to do with your risk.
Leverage is beneficial as it magnifies your results. Both profit and loss. But if you are losing you should not trade at all.
Členom od May 22, 2019   5 príspevkov
May 24, 2019 at 07:05
Your leverage counts for a lot. At 20:1 in terms of Risk at 2% of the current funds in your account it will take 11 loses to drop 20% of your account. This is assuming that you have set your stop loss at an appropriate level equalling 2% of your account should the trade go against you.

How long will it take you to regain that 20% before you can start to grow your account again?

Increase that to 3% risk and it will only take 7 losses to lose that 20%. Ergo the higher your leverage the faster you can lose your account.

Use 200:1 and you can easily lose your account in a single trade.

Take an exceptional event such as when the peg on EUR/CHF was removed. At the time the ratio was about 70:1 long on the EUR/CHF pair. What happened is the peg was removed and the pair dropped so fast the majority of the SL's did not react and many people lost a lot of money. Even well established companies went to the wall on that one.

Question

You put a single unit of your currency (does not matter which currency. Could be GBP, YEN, Raoul, Turkish Lira) long on that pair in 2013 at 20:1 leverage.

The pair dropped over 22k pips. How much will you now owe the bank because your Stop Loss's failed?
Now multiply that amount by 20 which is what you are doing at 200:1

A FACT although not FX Trading. A hedge fund called Long Term Capital Management (LTCM) used leverage well outside the normal bounds of between 2:1 to 10:1 for hedge funds.. Then in 1998 the SNP index shot up and they lost 6% of their fund in May then a further 10% in June of that year. On 17th August the Russians defaulted on their debt payments. LTCM did not much direct exposure to Russia. By the friday LTCM had lost another 15% of its capital equal to $550 million. Due to the leverage the companies portfolio was in the realms of about $120 billion. If they had not been rescued by the banks at a cost of about $4 billion the fall of that hedge fund would have been catastrophic to the financial markets globally.

So go figure they were not using 200:1 leverage although higher than the normal maximum of 10:1 for hedge funds.

If you want to know more about LTCM's demise find out either on the internet or get a copy of More Money THan God by Sebastian Mallaby for that and even more interesting facts about hedge funds :)
Don't put limits on your imagination, there is no telling.............
Členom od Oct 20, 2018   300 príspevkov
May 25, 2019 at 16:24
1:200 is not bad yes, but my personal choice from the start (8 years ago) is 1:500.
momchil_slavov@
Členom od Feb 22, 2011   4862 príspevkov
May 26, 2019 at 06:47
Spuzzana posted:
Your leverage counts for a lot. At 20:1 in terms of Risk at 2% of the current funds in your account it will take 11 loses to drop 20% of your account. This is assuming that you have set your stop loss at an appropriate level equalling 2% of your account should the trade go against you.

How long will it take you to regain that 20% before you can start to grow your account again?

Increase that to 3% risk and it will only take 7 losses to lose that 20%. Ergo the higher your leverage the faster you can lose your account.

Use 200:1 and you can easily lose your account in a single trade.

Take an exceptional event such as when the peg on EUR/CHF was removed. At the time the ratio was about 70:1 long on the EUR/CHF pair. What happened is the peg was removed and the pair dropped so fast the majority of the SL's did not react and many people lost a lot of money. Even well established companies went to the wall on that one.

Question

You put a single unit of your currency (does not matter which currency. Could be GBP, YEN, Raoul, Turkish Lira) long on that pair in 2013 at 20:1 leverage.

The pair dropped over 22k pips. How much will you now owe the bank because your Stop Loss's failed?
Now multiply that amount by 20 which is what you are doing at 200:1

A FACT although not FX Trading. A hedge fund called Long Term Capital Management (LTCM) used leverage well outside the normal bounds of between 2:1 to 10:1 for hedge funds.. Then in 1998 the SNP index shot up and they lost 6% of their fund in May then a further 10% in June of that year. On 17th August the Russians defaulted on their debt payments. LTCM did not much direct exposure to Russia. By the friday LTCM had lost another 15% of its capital equal to $550 million. Due to the leverage the companies portfolio was in the realms of about $120 billion. If they had not been rescued by the banks at a cost of about $4 billion the fall of that hedge fund would have been catastrophic to the financial markets globally.

So go figure they were not using 200:1 leverage although higher than the normal maximum of 10:1 for hedge funds.

If you want to know more about LTCM's demise find out either on the internet or get a copy of More Money THan God by Sebastian Mallaby for that and even more interesting facts about hedge funds :)

That is pure nonsense.
Even if your account leverage is 1:1000 it does not mean you trade with such risk.
Risk is determined by size of open position and stop loss.
forex_trader_688163
Členom od Feb 28, 2019   140 príspevkov
May 27, 2019 at 03:31
Yes, i agreed with @togr
Even you used 1:100, you still can wipe out your account if you still not using proper money management.
Členom od May 27, 2019   11 príspevkov
May 29, 2019 at 10:49
agreed! leverage is only good for people you have proper knowledge and are able to afford risks.
Členom od May 29, 2019   7 príspevkov
May 30, 2019 at 11:15
low leverage is obviously good for beginners as, low risk is involved, but the thing is high leverage and low leverage both are going to hurt, just the risk intensity is different.
Členom od May 30, 2019   1 príspevkov
May 30, 2019 at 14:29
hi every one here, i have my account balance of $200, i want to know the following aspects of risk or management,,,, leverage, lot size, risk reward ratio to be used and amount to lose per trade.
Členom od Oct 20, 2018   300 príspevkov
Jun 02, 2019 at 11:36
Filikunjombe posted:
hi every one here, i have my account balance of $200, i want to know the following aspects of risk or management,,,, leverage, lot size, risk reward ratio to be used and amount to lose per trade.

Tbh that`s a low balance. Can you expand it?
momchil_slavov@
Členom od Jul 09, 2019   38 príspevkov
Jul 17, 2019 at 09:35
Leverage is basically an investment technique of using borrowed funds to trade. With the help of leverage, you can trade to a much bigger extent, even if your own budget is less.
1:200 leverage means that for every $1 in your account, you can play a trade of $200. This will be provide to you as a loan from the broker. Be cautious with using a leverage as it not only gives you extra funds to trade but also has the power to take you to immense losses.
Členom od Jun 29, 2019   65 príspevkov
Jul 27, 2019 at 14:38
From my point of view, leverage can be an effective tool for a forex trader only when he will require funds. Otherwise working with levered funds can possess higher trading risks here. But yes, every trader will necessitate proper administration of funds which will allow him to work with his money at the best possible way. I feel that I am better with my own funds rather than working with any leverage.
Členom od Mar 05, 2017   20 príspevkov
Jul 31, 2019 at 10:19
Mohammadi posted:
In my opinion , 1:200 leverage is good for a newbie. Because at these leverage there will be a low risk and average profit that a newbie will be interested to trade in Forex market as well as invest. When a newbie invest in Forex market and have not enough knowledge about leverage , they take high risk . so that leverage is better option to me.
I think the maximum leverage is 1:50 for new people to be safe.
Členom od Jul 09, 2019   26 príspevkov
Oct 28, 2019 at 12:02
Exactly. Earlier i was using 1:100 with some broker and then i switched to Coinexx. Though they offer higher leverage of up to 500x but i am using 1:300.
forex_trader_484915
Členom od Dec 27, 2017   4 príspevkov
Oct 30, 2019 at 11:27
willtradr posted:
Exactly. Earlier i was using 1:100 with some broker and then i switched to Coinexx. Though they offer higher leverage of up to 500x but i am using 1:300.


1:200 is very ok, I gave a trader account of 1:500 and he blown it with lot of positions

By the way any trader that can manage on pamm account should pm me, funds those not belong To me and I must make sure trader meets all requirements before I push funds in
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