If you’re dealing with the majors, then the most you can have open at once is four. For example. USD/JPY, EUR/AUD, GBP/NZD, and CAD/CHF. Even then you have to worry about certain currencies being correlated at times. For example, there are times when USD and CAD are correlated, and AUD and NZD, or EUR, GBP, and CHF.
Of course if you do want to have overlapping or otherwise potentially correlated ones you can just cut your position sizes to keep your risk down where you want it.
Using leverages actually depends on your level of experience. But for relatively new traders, moderate leverages are actually preferable.
I think use high leverage not really bad, for small trader or retail trader which only using small capital with use high leverage will boosting opportunity but should keep using low risk and low volume lot size if want to safe trading, in my view leverage 1:500 already included high and now I have seen some broker offer more than these leverage
Some of them offer even unlimited leverages. Unlimited! Though, I don’t know how they work, as I’ve never used it, OMG
I agree with Pro King… a trader who doesn’t have much experience/doesn’t understand money management is more likely to blow their account much faster with high leverage.
Forex is a business where leverage is compulsory for survival and I think we should use the 1:500 leverage which is the perfect for efficient survival, using high leverage can cause the failure and we should use the leverage 1:500 which is best one.
Higher leverage always carries higher risk. If you don’t have enough experience it’s better to not use it as you can easily blow your account or lose even more. Usually the more professional traders use it however I’ve heard that most of them prefer the lowest possible level in order to minimize the loss. This thing for the unlimited leverage sounds absurd, I can’t imagine someone using it.
Why is 1:500 “the best one”?
Worst advice ever.
Absolutely [I]awful[/I] advice.
(But counterparty market-making brokers who trade [U]against[/U] their clients will absolutely [I]love[/I] you, and welcome you with open arms, because of course their own business model depends on identifying, attracting and then gradually emptying the accounts of “traders” who believe that. So[B] they’ll[/B] survive very efficiently!)
Yes, it is really bad to use high leverage. Use low instead of high leverage because, the higher the leverage, the higher the risks impact you put your trading account.
Like said many times above, If your not a professional trader, with a high strike rate, being consistent over a large period of time, , you should be using no larger then 50:1
anything over, should be exclusively for seasoned veterans ,
If you know what your doing, 50:1 is perfect,
Leverage is a byproduct of risk taken per trade as a percentage of account balance. So in all honesty it really doesn’t matter what leverage you may need to employee, as long as your total risk per trade is justifiable.
Typically, a trader would suggest to risk [as an example] 1% on a trade. The leverage required will depend on the size of his ‘stop loss’ and the rate being traded.
With a very short stop the trader is bound to be using a higher degree of leverage as the notional value per pip will be much higher, the same trade but with a wider stop would use less leverage as the notional value per pip would be much lower.
[U]So what does this mean?[/U]
It means that traders do not enter trades asking themselves “what leverage should I use on this trade”, rather they ask “what is the maximum percentage of my account I am willing to risk on this trade”, the leverage required is the byproduct.
right on Jezzode,
The problem tho with the higher leverage, is no matter what, if your wrong, you get wrong faster, and worse as the price moves against you.
So, like you mentioned, it allows a larger field of failure, with lower leverage, but the hole gets wider faster, when you use the higher leverage.
As to why I think, Using more MARGIN with Lower leverage, is the best why to go about it, then to use Higher leverage all together.
Regardless, to be in positive p/l, you have to be right in both situations., lol…
To be honest, I am not against on high trading leverage facility! But, it’s true, most of the Forex traders try to misuse this trading facility! Obviously, it’s not possible to make consistently big amount of money only based on high leverage facility, your trading plan and strategy are more important parameter here! So, concentrate on your trading strategy mainly instead of high leverage facility!
Exactly, not that it is bad or anything but we just have to be aware that there is risk attached to using high leverage. So we should definitely be careful with it.
Hmm for as far as I know, big margin means high volume which also means a high leverage. Do I miss something? Please correct me if I am wrong.
Yes … sorry, but I think you’ve fundamentally misunderstood what “leverage” and “margin” mean (and maybe “volume” too). [b]This little article will almost certainly help you[/B].
SMH, I had to go and check it out, ( High Leverage) Traders way allows me too.
4 losses, which all were from commission>trade profit, due to trail stop,
It would take 20 days to make $587,665,062.52 starting with $100
lol, thats funny,
