Quote:
Originally Posted by dpaterso
I have not been able to make sense of the fact that by DECREASING the leverage all you are really doing is INCREASING the amount of margin required to open a position. Right up until today I was under the impression that by DECREASING the leverage you were protecting yourself in some way by REDUCING the value of a single tick / point / pip movement and that INCREASING the leverage was a 'bad thing'. What I can't 'fathom' is if you are staying within your (Wilder's) money management rules then it WOULD APPEAR that INCREASING the leverage makes it EASIER to 'stick' to those rules. Let me explain:
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Dale, as I've said before (several times, I'm sure), the ONLY THING that changes pip value is position size. It matters not one iota what your leverage is. If you're trading a full EUR/USD lot a pip is going to be worth $10 no matter if you're using no leverage or 1000:1 leverage. The only thing that changes with your leverage ratio is your margin requirement.
See
How much leverage to use? Wrong question! for further discussion.