What leverage you prefer? - page 2
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I prefer to trade with bigger leverage but with smaller lots; leverage of 1:200 with a 0.01 lot on a good working trading plan should get you a steady profit on the long run. Though there are some few times, I love to stretch my profits by using the 1:500 leverage which is the maximum leverage offer by Profiforex to trade especially if m using my trend reversal trading system.
For personal trading i use 1:10 based on 1 lot per $10,000 and aim for 8% to 10% a month surplus. But as fund manager i use 1:1 based on 1 lot per $100,000 with a steady and consistent 2% to 3% gain a month. I think it depends what role you have. But trading with a high leverage such as 1:200 and so on, would expect that you are very familiair with good entries, solid stops and perfect moneymanagement. Otherwise it is another account grow&blow attempt.
Cheers!
1:1 leverage?
What is the size of the fund managed then?
Come on ... this is becoming funny
can some one please explain how leverage really works in trading context?
can some one please explain how leverage really works in trading context?
This probably can help :
The concept of leverage is used by both investors and companies. Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments by using various instruments that include options, futures and margin accounts. Companies can use leverage to finance their assets. In other words, instead of issuing stock to raise capital, companies can use debt financing to invest in business operations in an attempt to increase shareholder value. (For more insight, see What do people mean when they say that debt is a relatively cheaper form of finance than equity?)
In forex, investors use leverage to profit from the fluctuations in exchange rates between two different countries. The leverage that is achievable in the forex market is one of the highest that investors can obtain. Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. When an investor decides to invest in the forex market, he or she must first open up a margin account with a broker. Usually, the amount of leverage provided is either 50:1, 100:1 or 200:1, depending on the broker and the size of the position the investor is trading. Standard trading is done on 100,000 units of currency, so for a trade of this size, the leverage provided is usually 50:1 or 100:1. Leverage of 200:1 is usually used for positions of $50,000 or less.
To trade $100,000 of currency, with a margin of 1%, an investor will only have to deposit $1,000 into his or her margin account. The leverage provided on a trade like this is 100:1. Leverage of this size is significantly larger than the 2:1 leverage commonly provided on equities and the 15:1 leverage provided by the futures market. Although 100:1 leverage may seem extremely risky, the risk is significantly less when you consider that currency prices usually change by less than 1% during intraday trading. If currencies fluctuated as much as equities, brokers would not be able to provide as much leverage.
Although the ability to earn significant profits by using leverage is substantial, leverage can also work against investors. For example, if the currency underlying one of your trades moves in the opposite direction of what you believed would happen, leverage will greatly amplify the potential losses. To avoid such a catastrophe, forex traders usually implement a strict trading style that includes the use of stop and limit orders.
The source of the above is here : How does leverage work in the forex market?
1:1 leverage? What is the size of the fund managed then?
I think we will need very large amount for trading in forex. I prefer to trade with leverage 1:500. It's enough for trading although we start trading with $10 only. We must try to maximize it to get more maximal result in forex.
Hi everyone! I am new to this forum. Anyway I am here to share my 5 cent opinion on this topic.
I think be it an experience or beginner user, the leverage should always be set as high as possible,
it will come in handy when you really need to open another position during times of high down down.
In the use of leverage , the higher the leverage the higher the risk a trader should be ready to take . And so the level of experience influence how much leverage a trader can be able to handle.
Nobody should use high leverages - unless he has a death wish. Leverages like 1:500 (or the newest inventions of 1:3000) are not meant to be used by traders at all - they are there just in order to get brokers some quick pocket cash