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.
Roberto21 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.
Nice ratio on trading leverage but what’s your risk reward ratio on per trade?
New traders usually get into this kind of problem. Causes losses in high leverage trading. If a trader does not follow money management and risk management, he will never be able to make a consistent profit. Risk management has the power to cover the losses of two trades with one trade. Money management protects your investment at all times. So if a trader trades without maintaining high leverage and discipline, he will never succeed in trading.
TiffanyK posted: The higher leverage is not the problem, the missing knowledge of the trader is a big problem! You can lose the same way with a low leverage account
I agree with this point. yes, for sure trading on higher leverages is a risky game if you are an amateur and just started exploring the trading world. In this case, high leverage will surely blow up your account because you are unaware of how the market responds to economic indicators and other technical aspects. Thus, initially one must work on low leverage once you have gained enough confidence, you can surely opt for higher leverage.
After all, who doesn't like bigger treats with less investment.
GeorgeBischof posted: Yes, I agree with you. Demo account helps a trader to enrich his knowlege and also help him to practice all the tools and techniques of forex properly.
Yes demo account helps to test us our trading strategy. It is advisable that first we need to test our strategy on demo to find out winning percentage and risk reward ratio. Once we find it profitable we should move to live trading account.
the higher leverage can magnify your profits and losses by the same degree. with higher leverage if you’re having big profits, you can have big losses as well therefore, the higher is the leverage, the higher risk you’re taking.
Admoni posted: By and large traders who are particularly newcomers always fall a great loss due to non-sense planning and zero risk management plan, so before trading with high leverage it is more important to know how to manage risk.
There is a simple answer to it, higher the leverage lower is the margin requirement. But higher the leverage higher the risk.
Forex trading is the most risky business because of it's high leverage facilities. It becomes more risky when novice traders open big lots. As a result they get margin call every now and then. You need to be smart to make consistent profit.
No doubt it is high risk but it gives the high profits in returns as well if it goes in your favour. It is all in our mind. I personally believe in order to gain you need to take risks however I am not denying the fact that one should have enough knowledge before that.