have a problem with leverage..

[maheshsamudra]

i read this in school section. im new here. not more than a month.

"If you only have $250, open a demo account and stick with it until you come up with the additional $750, then open a micro account."
(this was in the article - leverage 0 the killer in school section)

what does this mean? is it i open the demo of 250$ and get a profit of 750$. then i can convert that demo into a real ac?

[Chick3nwing91]

I think it means save up a thousand before starting so you have enough leverage to trade with. At that point putting $250 in trades would only be 25% of your account and you would have 75% of it left over for leverage if the trades don't go your way.

[maheshsamudra]

I think it means save up a thousand before starting so you have enough leverage to trade with. At that point putting $250 in trades would only be 25% of your account and you would have 75% of it left over for leverage if the trades don't go your way.

thanx.hmmmmmm.......

[rhodytrader]

What it actually means is that you need to make sure you have more than enough money in your account to allow you to trade positions which risk small amounts of your capital (like 1%). The school advice is based on brokers with fixed minimum trade sizes (like micro contracts). The other option is to go with a broker that has no minimum trade size.

[maheshsamudra]

thanx..