What’s the problem with low trading leverage? Like 1:50?
That’s right, thats what i was getting at
because had he researched the margin that was required
he would have found that there is none
that was the point of what i said.
Yes you can trade without leverage in principle, but you would need to have a lot of money to play with to make trading worthwhile. The real movement in currency pairs is fractional so applying leverage introduces more profit potential for retail traders whilst allowing us to play on the interbank market.
Although your broker might provide leverage as a default setting on your account, you could always just choose not to use it by trading lot sizes that fall well within your account balance. So if you had 50k in your account then you could enter positions of:
10k,20k…30k etc… or 0.1,0.2 & 0.3 lots respectively
Yes and no. If you were an institutional trader or market maker on the spot foreign exchange you would not use leverage for your trades (where would you lever £100m too?). In that case you are buying and selling real currency so the currency in which you deposit your account becomes very important.
For example, if I was playing around with an institutional currency trading account with a balance of £100m (Sterling), then my trading would be buying and selling real currency, so if I wanted to take a view that USD would appreciate versus GBP then I would actually convert my GBP to USD by buying it and holding USD instead for the period of my trade.
However this presents a problem if I wanted to speculate on something like EURJPY. When my account is in GBP. So in that case my broker would agree an exchange rate for either EUR or JPY to GBP and the lend me that currency so that I could buy or sell the other for my trade. What actually happens is that I am lending my broker £100m and he is lending me the equivalent EUR for example, so that I can do my trade. This is called the Swap. In this Swap arrangement we agree to pay each other the interest that would have accrued on each of the currencies exchanged.
I would agree to receive the interest on GBP and pay the interest on EUR for example. The difference in these interest rates would be the Swap rate and my broker would automate the process of exchanging the interest rate differentials for the currency pairs exchanged, to either cost me money - if they are lending me a currency bearing higher interest - or pay me money - if I am lending them a currency bearing higher interest.
sorry this isnt true. everybody uses leverage especially in currency trades. just with big accounts it differes in form of how to and where from.
As a beginner, seeking to make things as simple as possible, can I trade without leverage?
Yes @mitsufisher, we provided a more detailed response for you in another thread where you asked the same question: Can I lose more than my deposit?
Related question, can a newbie retail trader be successful without leverage?
Better question: Can a newbie retail trader be successful period? Your goal should be to grow in knowledge and skill, so you are no longer a newbie.
“When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things.” - 1 Corinthians 13:11
sorry this isnt true. everybody uses leverage especially in currency trades. just with big accounts it differes in form of how to and where from.
Thank you for your contribution. With the benefit of experience on the institutional FX Market Making operation at Barclays Capital I can tell you definitively that they do not use leverage.
Better question: Can a newbie retail trader be successful period? Your goal should be to grow in knowledge and skill, so you are no longer a newbie.
“When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things.” - 1 Corinthians 13:11
Ahh… so you’ve see the movies HACKERS as well ,Have you, and are quoting THE CEREAL KILLER
because i know as a broker, You haven’t read the bible, that’s for certain
As a beginner, seeking to make things as simple as possible, can I trade without leverage?
The point is that if you had enough capital to trade without leverage, you wouldn’t be using a counterparty broker anyway: you’d be using a direct market access broker.
Unless you’re envisaging opening a very large account, the answer to your question is effectively “No, you won’t be able to do that”.
Note, also, that the leverage figures quoted within accounts are often variable, and that just because a “broker” (i.e. counterparty) offers “200/1 leverage” doesn’t usually mean that you have to use that much leverage. Choose a broker that allows you to adjust it to whatever leverage you want to use.
High leverage in itself isn’t dangerous. It’s the way inexperienced traders use it, combined with their poor understanding and unrealistic expectations and lack of risk-management skills that causes them the problems. But still, in general, it’s a good idea to steer clear of “brokers” offering ridiculously high leverage, for exactly the same reason that you should avoid “brokers” who offer deposit bonuses and competitions: it tells you specifically what kind of customers they’re trying to attract, and that in turn tells you enough about the way they do business to know that they should be avoided.
(Whether Barclays Capital trades with or without leverage isn’t relevant to what you needed to know, here. ).
(Whether Barclays Capital trades with or without leverage isn’t relevant to what you needed to know, here. ).
Well maybe not. MrDE decide to challenge my position and I felt it necessary to let him know that is was based on something and not just the nonsensical baseless prattle he has the proclivity for.
But still, in general, it’s a good idea to steer clear of “brokers” offering ridiculously high leverage, for exactly the same reason that you should avoid “brokers” who offer deposit bonuses and competitions: it tells you specifically what kind of customers they’re trying to attract, and that in turn tells you enough about the way they do business to know that they should be avoided.
This is an excellent point, @LukasVisser, and one we discussed in this thread: LOW leverage is in fact dangerous
because i know as a broker, You haven’t read the bible, that’s for certain
“And if any man think that he knoweth any thing, he knoweth nothing yet as he ought to know.” - 1 Corinthians 8:2
“And if any man think that he knoweth any thing, he knoweth nothing yet as he ought to know.” - 1 Corinthians 8:2
hehe
i can play this game as well it doesn’t mean that i’ve read the bible
well, actually i have … 3 times… but, just because i can do this, doesn’t mean that i’ve read the bible , that’s the point
and No, i’m not going to do , because it’s late and if i get into this , i’ll start seeing scripture in my dreams
so. you have a nice day
Now to the newbies that would put effort into a trade, CAN YOU PERHAPS OFFER SOMETHING ALONG THE LINES OF HE WHO SOWS SHALL REAP THE REWARDS OF HIS EFFORTS
Now to the newbies that would put effort into a trade, CAN YOU PERHAPS OFFER SOMETHING ALONG THE LINES OF HE WHO SOWS SHALL REAP THE REWARDS OF HIS EFFORTS
hehe
@FOREX.com
well mate , let’s put aside that POSERS using “it’s not about a salary it’s all about reality” are just trying to be like the one and only EAZY-E
but that aside
i shall respond as follows
Hell yeah…
We don’t need much in life, we just need ourselves and ALL WE ARE IS ALL WE NEED
This guy doesn’t even know that there is a difference between CFDs and Margin Trading and you let him ‘train’ newbies.
Ok mate, i understand what you are trying to say… ok
but like i said it has to stop somewhere
watching you guys is like this video here
Tom Araya asks an Audience Politely to be quite, THEY WERE INCAPABLE OF IT
it’s like you guys
a lot of you are incapable of just stopping
example… You mate
you had to say to mrde the balls in your court
think about this… WHAT ARE YOU TRYING TO ACHIEVE
HOW DOES IT HELP THE SITE
like i keep saying
I UNDERSTAND YOU
but, I’LL LEAVE YOU TO IT
You guys are not capable of stopping, or so it seems
and thus this site gets polluted with crap like this
think about it
you said you agree with me
so… Just stop then… simple as that
Hi guys.
I understand that we all want to help the OP and share knowledge based on our own experiences. After all, that’s what the community is all about. However, we believe that we could do so in a calm and collected manner. There’s no need for name-calling, no need for insults, and definitely no need for ultimatums.
There is nothing wrong with wanting to argue for your position. But arguing in this manner simply obstructs the learning opportunity for the OP. I hope we keep that in mind.
I’m closing this thread for now, just to give you guys some time to collect your thoughts.
Gents, you’ve taken the “discussion” into PM territory, if even that is warranted. Please don’t post any more in this topic, as if you continue on the current course, your messages will get deleted. Cleanup is on the way.
This is true. I tried to set my account to 1:1 leverage but it wasn’t possible. Instead I trade lotsizes within my available balance.
I have not watched the movie HACKERS but I will now! While I am losing ~1000USD on a LTC position and praying for the bulls to save me.