Is Forex Trading Gambling - Page 2
Page 2 of 3 FirstFirst 1 2 3 LastLast
Results 11 to 20 of 30
  1. #11
    To keep it simple.
    If I have $1000 to trade with and to keep my leverage at 1:1, I need to place a a mirco trade of 0.01 lots.
    If I have $10,000 to keep it at 1:1, I can place a mini of 0.1

    If i were to use .05 lots on $10,000 what is my leverage?

  2. #12
    Join Date
    Sep 2010
    Location
    Cheshire, UK
    Posts
    2,210
    What currency pair would you be trading, what denomination is your account in and finally what is the market rate (exchange rate) within this example.

  3. #13
    Understandable some trading platform dont use the Lot system and go by 1 standard trade which is $100,000. So to use 1:1 leverage you will have to place a $100,000 trade.

    To reduce risk all you have to do it place a $50,000 trade this reducing leverage by 50%

  4. #14
    This will be varying depending on the currency you are holding and pairs you are trading with.

    I hold AUD so trading eur/usd for example will have a different degree of sizing.

  5. #15
    Join Date
    Sep 2010
    Location
    Cheshire, UK
    Posts
    2,210
    Ok, I see the confusion here.

    If your account size is greater than the total value of notional trades open, then it may appear that you are using less than 1:1 leverage.

    However, it always remains at 1:1, regardless. The remaining equity in your account which is left over from this 1:1 leverage trade is simply not being used, is not invested, and can not be effected by the trade in question.

    This remaining equity may as well not be in your account.

    Quote Originally Posted by ForexTFP View Post
    Understandable some trading platform dont use the Lot system and go by 1 standard trade which is $100,000. So to use 1:1 leverage you will have to place a $100,000 trade.

    To reduce risk all you have to do it place a $50,000 trade this reducing leverage by 50%
    Let's look at this as a great example.

    The trade has a notional value of $50,000

    You have $100,000 in your account.

    You use 1:1 leverage and $50,000 is now tied up in the trade. You also have $50,000 left over sat in your account which is not being used. The most you can lose on this trade is the $50,000. You will always have the remaining $50,000 left in your account. This remaining $50,000 is doing nothing - it can not drop the leverage used below 1:1 because it is not being used on the trade in question.

    I'm not trying to confuse you
    But it's a mathematical impossibility to drop below 1:1 leverage

    If you don't want to believe me then you can call your broker - it will be the quickest call you've ever had.

    Quote Originally Posted by ForexTFP View Post
    The most successful traders i have met are those that trade with over 100k and trade as a 1:1 ratio or less, trade pairs that give only a positive yield.
    I'm quite surprised that successful traders have told you this, I'd personally question this...

    Where is Clint - He usually provides insightful examples of this nature.
    Last edited by Jezzode; 04-17-2017 at 08:24 AM.

  6. #16
    Join Date
    Mar 2015
    Posts
    621
    I am trading also use cent account now and start small capital, I am not forex as gambling but trying to treat money with risk management trading plan and start lowest lot size, but I like use high leverage like as many retail trader that still not treat forex as serious manner

  7. #17
    Quote Originally Posted by Jezzode View Post
    Ok, I see the confusion here.

    If your account size is greater than the total value of notional trades open, then it may appear that you are using less than 1:1 leverage.

    However, it always remains at 1:1, regardless. The remaining equity in your account which is left over from this 1:1 leverage trade is simply not being used, is not invested, and can not be effected by the trade in question.

    This remaining equity may as well not be in your account.

    Let's look at this as a great example.

    The trade has a notional value of $50,000

    You have $100,000 in your account.

    You use 1:1 leverage and $50,000 is now tied up in the trade. You also have $50,000 left over sat in your account which is not being used. The most you can lose on this trade is the $50,000. You will always have the remaining $50,000 left in your account. This remaining $50,000 is doing nothing - it can not drop the leverage used below 1:1 because it is not being used on the trade in question.

    I'm not trying to confuse you
    But it's a mathematical impossibility to drop below 1:1 leverage

    If you don't want to believe me then you can call your broker - it will be the quickest call you've ever had.



    I'm quite surprised that successful traders have told you this, I'd personally question this...

    Where is Clint - He usually provides insightful examples of this nature.

    I'm not trying to confuse you
    But it's a mathematical impossibility to drop below 1:1 leverage

    There is no confusion on my part but mathematics is not only linear progression.

    But I know where you are coming from and how I am trying to explain it as in reducing risk. One does not have to use 1 full lot per $100,000.

    As I have said I know the most successful traders do not leverage up and in theory reduces leverage by 50%

    You can go on about using only $50k of your $100k balance but this will bring rise to over risking, by NOT understanding how leverage works.

    I will leave it here as its going off the post topic.

  8. #18
    Join Date
    Aug 2015
    Location
    Singapore
    Posts
    160
    Quote Originally Posted by Jezzode View Post
    Ok, I see the confusion here.

    If your account size is greater than the total value of notional trades open, then it may appear that you are using less than 1:1 leverage.

    However, it always remains at 1:1, regardless. The remaining equity in your account which is left over from this 1:1 leverage trade is simply not being used, is not invested, and can not be effected by the trade in question.

    This remaining equity may as well not be in your account.



    Let's look at this as a great example.

    The trade has a notional value of $50,000

    You have $100,000 in your account.

    You use 1:1 leverage and $50,000 is now tied up in the trade. You also have $50,000 left over sat in your account which is not being used. The most you can lose on this trade is the $50,000. You will always have the remaining $50,000 left in your account. This remaining $50,000 is doing nothing - it can not drop the leverage used below 1:1 because it is not being used on the trade in question.

    I'm not trying to confuse you
    But it's a mathematical impossibility to drop below 1:1 leverage

    If you don't want to believe me then you can call your broker - it will be the quickest call you've ever had.



    I'm quite surprised that successful traders have told you this, I'd personally question this...

    Where is Clint - He usually provides insightful examples of this nature.
    V great info.. Now I know what the real difference between 1:1 until 1:50

  9. #19
    Join Date
    Sep 2010
    Location
    Cheshire, UK
    Posts
    2,210
    Quote Originally Posted by ForexTFP View Post
    I'm not trying to confuse you
    There is no confusion on my part but mathematics is not only linear progression.

    As I have said I know the most successful traders do not leverage up and in theory reduces leverage by 50%

    You can go on about using only $50k of your $100k balance but this will bring rise to over risking, by NOT understanding how leverage works.

    I will leave it here as its going off the post topic.
    You're referring to effective leverage, not leverage used. As I have said, you can not use less than 1:1 - this is impossible and has nothing to do with maths being linear - there is no need to try and make a simple calculation sound complicated.

    This is also a proven fact when trading on a margined account. Every retail trader, commercial trader and broker understands this and uses it day in, day out, without any problems. But, for some reason you can't agree with it and want to be the minority.

    You need to understand this if you're going to use it as the foundation of a constructive argument.

    It is what it is.

    Considering you have a twitter feed where you apparently provide advice, I would assume that these basics would be second nature to you. Quite rightly so Babypips removed this link earlier this afternoon.
    Last edited by Jezzode; 04-17-2017 at 02:01 PM.

  10. #20
    The richest 1% of the world are a minority.
    Top 5% of the forex market are a minority.
    Someone here will understand Im sure.

Forum Sponsors

Similar Threads

  1. How forex trading is different from gambling?
    By Danielthomas in forum Risk Management Practices
    Replies: 108
    Last Post: 04-18-2017, 04:21 PM
  2. How do taxes work for forex trading?
    By OoogleeMooglee in forum Trading Discussion
    Replies: 21
    Last Post: 07-25-2015, 12:35 PM
  3. "Forex Trading is as good as gambling and it never pays"
    By Caesar95 in forum Beginner Questions
    Replies: 19
    Last Post: 12-29-2013, 03:43 PM
  4. Forex Trading - Is it just a form of gambling?
    By Empowers in forum Beginner Questions
    Replies: 140
    Last Post: 08-26-2012, 03:14 AM
  5. This forex trading looks more like gambling.
    By pipsodent in forum Beginner Questions
    Replies: 12
    Last Post: 01-05-2010, 02:22 PM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
"As long as you're going to think anyway, think big."
Donald Trump