High leverage , High risk ?
Member Since Feb 22, 2011
4862 posts
Sep 28, 2017 at 14:43
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
Exactly.
Moreover for underfunded account of beginner trader leverage is a must. Otherwise he cant trade at all.
Member Since Nov 03, 2015
9 posts
Oct 01, 2017 at 06:27
Most traders fail because of using too much leverage.
Short-term price movements are market inefficiencies - take advantage
Member Since Oct 06, 2017
12 posts
Oct 08, 2017 at 06:18
$100 x 1000 = 100,000 . Could you afford to lose that?
Member Since Feb 22, 2011
4862 posts
Oct 08, 2017 at 06:21
Wamski posted:
i have an account of 1:1000 using $100, so am i safe.
i also need someone to explain the difference and complication of using high leverage
High leverage has an advantage. It allows you to trade as without leverage with $100 you cant trade at all.
Low leverage is by many understood as account protection as with low leverage your loosing trades are liquidated early.
For experienced users there are many other tools how to protect your equity despite high leverage.
Oct 10, 2017 at 06:34
togr posted:Wamski posted:
i have an account of 1:1000 using $100, so am i safe.
i also need someone to explain the difference and complication of using high leverage
High leverage has an advantage. It allows you to trade as without leverage with $100 you cant trade at all.
Low leverage is by many understood as account protection as with low leverage your loosing trades are liquidated early.
For experienced users there are many other tools how to protect your equity despite high leverage.
please correct me if am wrong, i believe the 'your loosing trades are liquidated early. ' is mainly based on your lot size.
Tomorrow is far away but yesterday is so close.
Member Since Feb 22, 2011
4862 posts
Oct 10, 2017 at 14:39
Wamski posted:Lets look into details.togr posted:Wamski posted:
i have an account of 1:1000 using $100, so am i safe.
i also need someone to explain the difference and complication of using high leverage
High leverage has an advantage. It allows you to trade as without leverage with $100 you cant trade at all.
Low leverage is by many understood as account protection as with low leverage your loosing trades are liquidated early.
For experienced users there are many other tools how to protect your equity despite high leverage.
please correct me if am wrong, i believe the 'your loosing trades are liquidated early. ' is mainly based on your lot size.
Lets say i trade 0.01 EURUSD on 1,030 EUR account.
0.01 lot represents 1,000 units.
Lets assume marklet moves against you $100 and then moves $100 in positive.
1. Without leverage
So to open such trade I would need 1000 EUR for margin. 30 EUR is left to cover trade negative. If markets move against me $30 and I reach stop out my position will be liquidated early.
2. With 1:2 leverage I would need 500 EUR for margin. 530 EUR is left to cover trade negative.If markets move against me $530 and I reach stop out my position will be liquidated early
So with the same position trade outcome is different.
Member Since Feb 22, 2011
4862 posts
Oct 12, 2017 at 14:46
Wamski posted:
Oh thanks vontogr 😄 for explaining.
of course the risk could be limited by EAs or stop losses
Nov 19, 2017 at 08:22
Many traders consider leverage as a borrowed of money. But in order to me , it is not a borrowed money but you use your money (capital) as leverage. Meaning you are betting your own money and increase or decrease the stake of risk by increasing or decreasing your leverage. for example if you use 1:100 leverage that mean if you going to incur loses your loses will be 100 times that your actual loses or if you make profit your profit will be 100 times more than the actual profit.
Member Since Apr 06, 2018
254 posts
Aug 19, 2018 at 18:53
Mohammadi posted:This comment make no sense. First you say high leverage is an important financial tool then you say high leverage can cause great losses. You need clarity of thought before posting.
high leverage and minimum margin requirement are an important financial tool which an investor should consider when choosing a broker. but generally high leverage causes a great losses if there is no real money management.
The market will trade through it’s path of least resistance .
Member Since Apr 06, 2018
254 posts
Aug 19, 2018 at 19:03
if you are taking 1-2% risk per trade and trading few currency pair you may need leverage of 1:10 only. So most of time you are using only part of leverage that is provided by broker if you use strict money management.
The market will trade through it’s path of least resistance .
