High leverage , High risk ?

millerwe 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

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.

I agree with you mate! Traders need to consider the money management issue so sincerely! Unless having a good plan, high leverage would be costly for sure.

AmDiab posted:

millerwe 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

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.

I agree with you mate! Traders need to consider the money management issue so sincerely! Unless having a good plan, high leverage would be costly for sure.

Money Management is probably more important even than your trading strategy.

TeraPips posted:

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).

You are right. I did not take into account the fact that a beginner often does not have good money management. The leverage 1:100 should be used with balanced strategy.

A beginner will lose it all on 1:1000 or 1:10. I think there should be enforced use of demo account for 1 month before open live account and a video course on risk management that all traders must watch before account is opened. That would help people a lot more

Jingyi posted:
A beginner will lose it all on 1:1000 or 1:10. I think there should be enforced use of demo account for 1 month before open live account and a video course on risk management that all traders must watch before account is opened. That would help people a lot more

Even after ESMA which limits leverage drastically there is no decrease of losing traders.

togr posted:
Even after ESMA which limits leverage drastically there is no decrease of losing traders.

Indeed. The only difference is that they have to deposit bigger amounts of money in order to lose.

For avoiding risk I always use 1:100 leverage in spite of having up to leverage 1:2000 , actually leverage is an important financial tool which always contains risk , so it is better if we avoid using high leverage in real account.

Imamul posted:
For avoiding risk I always use 1:100 leverage in spite of having up to leverage 1:2000 , actually leverage is an important financial tool which always contains risk , so it is better if we avoid using high leverage in real account.

Same to me! I think, most of the retail traders who are aware of money management issue they are playing with 1:100 trading leverage.

Trading with high leverage in demo account is right decision , because leverage contains always higher risk in live account , it could be dangerous at any time despite of most accurate trading plan .

Mohammadi posted:
Trading with high leverage in demo account is right decision , because leverage contains always higher risk in live account , it could be dangerous at any time despite of most accurate trading plan .

I don’t think it’s a good idea. Because, we need to treat in the demo as like our live. Same strategy, same plan even same mental preparations.

Adribaasmet posted:

Mohammadi posted:
Trading with high leverage in demo account is right decision , because leverage contains always higher risk in live account , it could be dangerous at any time despite of most accurate trading plan .

I don’t think it’s a good idea. Because, we need to treat in the demo as like our live. Same strategy, same plan even same mental preparations.

i agree. demo is available to us for learning, why would we need demo if not for learning how to pull off our strategies and how not loose money.

Basically, seriousness is very important! If we are not careful during demo trading, then there is no value.

AniLorak posted:
Basically, seriousness is very important! If we are not careful during demo trading, then there is no value.

You are absolutely right mate, demo is useless for you until you don't take it seriously.

When on demo it is important to use same leverage account because if demo is 1:500 and real is 1:20 there will be big difference in number of trades opened

you must use the same mindset than real money trading

SaltaLargo posted:
When on demo it is important to use same leverage account because if demo is 1:500 and real is 1:20 there will be big difference in number of trades opened

Rather in size of the trades
Leverage does not affect opening trade but its size

Why Leverage is Incorrectly Considered Risky. Leverage is commonly believed to be high risk because it supposedly magnifies the potential profit or loss that a trade can make (e.g. a trade that can be entered using $1,000 of trading capital, but has the potential to lose $10,000 of trading capital)

SaltaLargo posted:
When on demo it is important to use same leverage account because if demo is 1:500 and real is 1:20 there will be big difference in number of trades opened

I think, traders should use the demo as sincerely as like their real account! In addition, same trading features including the leverage number.

AniLorak posted:

SaltaLargo posted:
When on demo it is important to use same leverage account because if demo is 1:500 and real is 1:20 there will be big difference in number of trades opened

I think, traders should use the demo as sincerely as like their real account! In addition, same trading features including the leverage number.

Yes, that’s the good practice! I see, which traders are enjoying today’s live trading, they were very serious in their demo, that’s the main trick.