Is High Leverage x Low Volume == Low Leverage x High Volume

New comment
 

Hi all,

Which is better approach (considering risk management etc.)

100x Leverage and 0.01 volume or 10x Leverage and 0.1 volume?

 
MEHMET FATIH BARUT:

Hi all,

Which is better approach (considering risk management etc.)

100x Leverage and 0.01 volume or 10x Leverage and 0.1 volume?

Volume - what you meean?  Lot size or something else?

 

Risk management has nothing to do with leverage.

Leverage affects margin required, not tick value.

If you open 0.1 on 1:500 account or 1:100 you can loose same amount of money.

 
If you are worried about margin and leverage, you are not controlling your risk.
  1. Never risk more than a small percentage of your account, certainly less than 2% per trade, 6% total to the account. Risk depends on your initial stop loss, lot size, and the value of the pair. It does not depend on margin and leverage. No SL means you have infinite risk.
    1. You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.
    2. AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)
    3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
                MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum 2017.10.10
                Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum 2018.02.11
                Lot value calculation off by a factor of 100 - MQL5 programming forum 2019.07.19
    4. You must normalize lots properly and check against min and max.
    5. You must also check FreeMargin to avoid stop out

    Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.

  2. Search for a GUI/Trade Assistant EA like mine (for MT4): 'Money Manager Graphic Tool' indicator by 'takycard' - Risk Management - Articles, Library comments - MQL5 programming forum - Page 6 #55
 
Astronautas:

Volume - what you meean?  Lot size or something else?

lot size

 
MEHMET FATIH BARUT:

Hi all,

Which is better approach (considering risk management etc.)

100x Leverage and 0.01 volume or 10x Leverage and 0.1 volume?

If you are speaking on trade leverage (and not account leverage) - then I will say the second is much better.  Of course, together with low risk percent per total risk (as William suggested).
Leverage should be lower, specially if you can not pin point an entry point to the pip.

If you have an ea which can pip point, then only I will consider higher leverage trades.
Otherwise, it's safer to reduce trade leverage, as well as trade total risks.

New comment