It generally does not matters that if you have higher leverage then you will be having higher risks just look at in a positive manner when you will be in profits with maximum leverage then your profits will also be maximum whether you are in profits or losses you should have proper knowledge about the leverages and broker prior to trading as leverage is a two-edged sword it has both pros and cons to it.
To talk correctly, you do not need to focus on the fact that there is a certain high risk, you need to focus on the fact that it is profitable enough and to some extent will be more profitable for you.
Stonesong posted: To talk correctly, you do not need to focus on the fact that there is a certain high risk, you need to focus on the fact that it is profitable enough and to some extent will be more profitable for you.
but the investor should keep in check all the aspects before putting his money it's his hard-earned bucks so first think about it
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.
Although leverage seems tempting to traders in terms of returns, it can be highly risky if traders don’t take proper risk management strategies. Before picking up leverage, traders should think of it in terms of loss, rather than profits. Since risk and reward walk together, traders shouldn’t place more than what can’t afford to lose. 0
High leverage only equals high risk if you change your trading behaviour neagtively towards it. If you are trading with good risk management across individual and collective open trades then leverage can just ensure more of a buffer for you.
Leverage is a very risky instrument for trading. I actually used to stay away from it for quite a decent period of time just because of the fear of losing more than I can afford. However, on practice, leverage risks can also be controlled. The calculation of the position size is more complicated but it is possible. Another questionis when newbies start using leverage in their trading immediately after coming to trading. This thing is really dangerous for their budgets and leverage can make them lose everything within a single trading session.
Using high leverage can increase the risk of losing. To be on the safe side one needs to play smart with leverages. Using stop loss is one of the tools that one can use to reduce the adverse effect of leverage.