i just realized there are different ways to trade the same lot size.
for example, i can trade a $10,000 lot with -
100:1 leverage and $100 margin (100 x $100) or
500:1 leverage and $20 margin (500 x $20)
in the 2nd case, i am using very high leverage which we are discouraged to use everywhere.
however, in both cases i am risking $1/pip. what is the danger of high (500:1) leverage here?
from my current understanding, it seems that the 500:1 leverage is in fact less risky; if my account balance is $1000, the price would need to move 980 pips against me for me to get a margin call ($1/pip, equity: $1000), whereas with 100:1 leverage, i will get a margin call with a 900 pip loss.
any clarifications on this would be appreciated. thanks!
Hi there! The danger of leverage is only on overleveraging an account and open positions too big for an account to handle. Unexperienced or eager traders will see leverage as an opportunity too make a lot of money because they may see an opportunity to open huge positions that can give them big profit quickly with a small account but the losses eat their account very fast. Think about it, with a 1000$ and 100:1 leverage you can open a 90,000$ position and make 9$ per pip that has to be attractive to some people.
In your example the only diference is in the money you invest, either you put down $100 on the 100:1 example or 20$ on the 500:1 the end result is the same. The problem is always opening positions too big for your account to handle.
For example its possible to open an 10000$ position on a 200$ account with 100:1 but that may not be the the best idea because a 20$ loss for example in a 1000$ account may acceptable its a 2% loss on your account, the same 20$ loss on an a 200$ account is 10% in that account.
If you manage your account correctly and have the right equity then leverage is not a problem and can help you out, without leverage you could not profit from the forex market unless you have a huge huge account.
Most of them may call you later but lets say you didnt read the contract clearly.
Maybe they want you to do a margin call all the time so that when your thousands in the hock you have to reimburse them with the money.
Btw if you were to have or want to something with a 900 pip stop loss why not take the other end of the trade… with a huge loss like that you’d need a huge accuracy rate to even make some money.
What you have posted is essentially correct, EXCEPT for the two statements (above) which I have shown in red.
In your example, you are not using dangerously high leverage. In both cases (1st case and 2nd case) you are using the same 10:1 leverage. Recall that the actual leverage you use in any trade is simply your position size divided by your account balance. In your example, $10,000 ÷ $1,000 = 10 (or, expressed as a ratio, 10:1 leverage).
So, what are the 100:1 and 500:1 figures? They represent limits — maximum allowable leverages — imposed by different brokers.
[B]As long as the actual leverage you are using is well below the maximum allowable leverage offered by your broker, you can pretty much forget about leverage, forget about margin amounts, and forget about margin calls.[/B]
In my opinion, high maximum allowable leverage is a good thing. The higher, the better. I’d like to have 100,000:1 maximum allowable leverage. But, I would continue to enter positions which are between 5 and 10 times the size of my account, because that’s my comfort zone. That is, I would continue to use actual leverage of 5:1, or at most 10:1, regardless of how much leverage my broker offered me.
Regarding risk, it is not risky to have very high maximum allowable leverage. It is risky to [B]use[/B] very high leverage.
If your broker is regulated by the CFTC (government regulator) and the NFA (industry regulator) — in other words, if you have a U.S. broker — then your broker is permitted by law to offer you leverage [B]up to 50:1.[/B] This limit was imposed in 2010. Prior to that, retail forex brokers in the U.S. could offer much higher leverage. Most of them offered 100:1 or 200:1.
Higher leverages are offered by offshore brokers, in some cases as high as 1000:1. But, many offshore brokers will not deal with U.S. residents, because of threats, intimidation and lawsuits by the CFTC, if they do so. It is possible for experienced U.S. traders to find reliable, well-regulated offshore brokers who [B]will[/B] deal with them. But, this is not an area that brand-new newbies should venture into.
You are quite correct: US Traders are ‘topped out’ at 50:1 and if you want my opinion it should have been ‘topped out’ like Futures i.e. maximum of 4:1 if you’re LUCKY and mostly NO leverage. And the same to should be forcibly applied globally.
To answer the thread starters question: unless you have iron clad risk management and self discipline then ANY leverage is NOT a good thing. I’m afraid the statistics prove this beyond a doubt. Not knowing how to trade won’t make you money with or without leverage. The difference??? You won’t ‘lose your WHOLE shirt’ (capital). In most cases: you’ll be margin called (if you’re wrong on the trade) LONG before your capital has reached almost ZERO and what’s more you’ll be forced to take your trading ‘down a notch’ thus affording you the time to either put more work into learning and testing and giving you a better chance of success as opposed to being a ‘one hit wonder’ that failed miserably and then going around the world saying that ‘you cannot make money trading’.
The statistics would change ‘on a dime’ if for no other reason than that it would keep a HUGE portion of inexperienced (and therefore ‘fodder for fleecing’ without the broker even having to ‘pull moves’) traders out of the markets. And that’s ‘just for starters’. Leverage (especially high leverage) is a little ‘devil’ that will ALWAYS be sitting on your shoulder whispering ‘use me use me because I’m there for you’ (on the shoulder of both a new trader AND an experienced trader). It’s ‘just there’ because ONE day: the trader will ‘drop their guard’ and use it ‘just because it’s there’. And it may well be that ONE day and ONE trade that will halve their account if not wipe it out completely possibly after YEARS worth of hard work.
Basically I believe NOW that in this business: ‘if you cannot pay then you should not be playing’.
And by the way: I noticed a mention of being stopped out USUALLY when your free margin percentage reaches 50% or using a margin call as a stop loss. Don’t be fooled. Some brokers will allow that free margin percentage go to NEGATIVE before margin calling you. In other words: they’ll wait until there is NOTHING left before margin calling you (forget about free margin percentages and the like). Of course: they’ll margin call you JUST before you would end up owing THEM money.
Sorry: but there’s the ‘evil’ side of leverage ‘told like it is in practise’.
‘Rich’ coming from me given that we offer 200:1 leverage on FOREX??? Maybe. But just because it’s ‘on offer’ doesn’t mean I (personally) encourage my clients to use leverage. Big difference.
thanks for the great responses! this forum is very welcoming as a newbie i do sometimes use biased reasoning to come up with reasons why i should use high “actual” leverage because it’s just that tempting. sometimes i wonder, if i’m not using high leverage then what’s the point of spending so much time and energy on forex, if i can only make tiny amounts. however, in an article i read on goforex the author says you can make good money with low leverage.
i know that most people here recommend not risking more than 2% of your capital on a trade. in the example i provided in the first post, i’m actually using 2% of my trading capital when there is 500:1 leverage. however i’d need to use 10% of my trading capital when there is 100:1 leverage to open the same position size. thus, 500:1 is better in this case right?
Well let’s just clear up one thing here (that you may or may not understand and even if you do understand there are LOADS that don’t understand the difference).
Put it this way: leverage in NO WAY affects the $ value per pip movement that you get on an instrument or FOREX pair. 10 000 units of EUR/USD at ANY broker will give you $1 per pip movement regardless of whether you’re leveraged at 1:1 or 1000:1. The ONLY difference will be in the amount of capital ‘tied up’ by that position i.e. capital that you cannot use for anything else until that position is closed one way or another. RISK management is another story altogether. The ‘generally accepted rule’ is that nobody should RISK (‘be able to lose’) more than 2% of their capital on any single trade if it goes against them and gets stopped out. That’s a different thing to what percentage of you capital that you’re using or ‘tying up’ to open a position. Do you see what I’m saying here. All that high leverage affords you, given the same lot sizes, is the ability to open more positions at the same time because you have the available margin to do so. This in and of itself is ‘tempting’ and can be a potential pitfall. In other words: even although you’re only RISKING or LIMITING your loss on a particlar trade to 2% of your capital you may very well end up being able to open another four or five positions, while STILL only RISKING or LIMITING 2% of your capital on each of those trades. BUT: if they just happen to be highly postively correlated instruments (in other words they move in the same direction for the most part) then all of a sudden (even although you’re sticking to the ‘never lose more than 2% of your capital on any single trade’ rule) in EFFECT you could be exposed to losing, say, 10% of your capital at that particular point in time should all those positions turn against you.
What I’m saying is that don’t get confused by the percentage of your CAPITAL that you’re using to open a position and the amount of RISK of your capital that you’re risking on a trade. It’s two different things.
The best advice I’m come across in this regard was dispensed by one of our very own members here: ‘R Carter’. If you’re going to trade multiple instruments or pairs: begin trading only ONE instrument or pair and only once profit has been locked in (by whatever means it is that you’re using to manage your stop losses e.g. a trailing stop) THEN and ONLY then look for a second trade on another instrument or pair. The simple alternative to this is to simply trade only one instrument or pair at a time and never have multiple positions open. That’s the best advice I’ve seen given on the subject.
As I said: leverage in an of itself is not a bad thing. But it’s how it’s managed or used or ABUSED that makes a HUGE difference and all high leverage does REALLY is encourage the new an unsuspecting trader to overtrade their account ‘simply because they can’ (because they have the available margin to open five, ten, or twenty positions at once NOT THINKING that the combined effect of those $ value per pip movements are WAY more than their account can ‘handle’).
[QUOTE=dpaterso;312281]… and if you want my opinion it should have been ‘topped out’ like Futures i.e. maximum of 4:1 if you’re LUCKY and mostly NO leverage. And the same to should be forcibly applied globally…
QUOTE]
You should be forcibly burned at a stake for such sacrilege.
You’re like the guys who say, “I don’t use that much leverage so nobody else should…me me me all about me”, and that is very fergin irritating.
Why the H E double hockey sticks do you think paper money, which apparently is infinite in supply, should have low leverage? The FED doesn’t give two hoots if it inflates your savings out of existance so why should you care about how
leverage impacts exchange rates?
With a few hundred pips between your average & the current price you can SAFELY increase your leverage above 20:1, even to 40:1, and make tens of % per hundred pips in a long term trend; now tell me you don’t want that or say I can’t so you shouldn’t be able to…
Srry, you just ruffled my feathers, that is all :46:
so Dale wants 4:1 leverage and Clint wants 10,000:1 I will side with Clint on this one. I don’t need anyone protecting me from myself. I’ll light a fire in my fireplace with 100 dollar bills if I want to, I dare anyone to try to stop me. It’s my money after all.
The risk disclaimers are every where you look. Everyone knows the risks involved or should. It’s every noob’s responsibility to learn or burn, well it should be anyway.
Sword, I would still like to see a description of your concept of trading ‘space’. What little Ive seen of it so far looked very interesting. Is it something you invented? Or is there somewhere I can read more about it.
‘Forcibly burned at a stake’??? You’re getting a bit ‘hot under the collar’ there!!! (Excuse the pun)!!! LOL!!!
About my ruffling your feathers??? Quite understandable but was not my intention and I apologise.
Now to the ‘nitty gritty’:
Believe it or not: I DO NOT trade with 4:1 or NO leverage. But I KNOW that IS what I SHOULD be trading with and sooner rather than later I’m hoping I’ll be in such a position. And anybody that asks me about leverage: I advise them to ‘do as I say or recommend and not as I do (at the moment)’. Of course: nobody listens and of course the ratio of winners to losers remains constant.
Leverage in the hands of let’s say a ‘Clint’ or YOU (although I don’t know anything about you but let’s assume you’re profitable and don’t constantly wipe out accounts) or an ‘R Carter’ is NO problem (and my apologies for leaving out a few traders who I BELIEVE, based only on their posts, are consistently profitable) who probably fall into that 5% of consistently profitable traders. It’s the 95% that ‘lose their shirts’ that I’m worried about (difficult as that may be to believe coming from me). And I believe that high leverage is BUT ONE factor that contributes to ‘wipe out’ after ‘wipe out’ after ‘wipe out’. And I ALSO believe that the NFA, CFTC, and ‘Uncle Barney’ and Senator Dodd know this too hence the regulations in the USA.
And while YOU or TalonD or Clint (or any of the other ‘top 5%’) may not need to be ‘protected from yourselves’: you’re certainly in the minority.
Have you actually thought about what leverage REALLY is??? It’s nothing more than credit. ‘Dress it up’ anyway you like. That’s what it is. So think about this: YOUR BROKER is LENDING YOU THEIR MONEY to make AND TAKE MORE MONEY FROM THEM than they’d lent to you??? Now I know that I did well in my previous business but that’s only because I was good at what I was doing NOT because I was a good and shrewd businessman. But there is no way (not matter HOW dumb a businessman I may be) I’d lend somebody money, to enable to them to make AND TAKE MORE MONEY from me than I’d lent to them UNLESS I was 95% (good figure to use) sure that I’d end up getting back NOT ONLY the money that I’d lent to them BUT THEIR OWN money too. And HERE I’m talking about REPUTABLE brokers i.e. those that will leave the new trader to his / her own devices. I’m not even TALKING about the ‘bucketshops’ that will do everything in their power to ENSURE that they get their money back AND yours (the sheer irony being that it’s nothing that they even need to worry about anyway and just makes their names bad is all). High leverage is a ‘rope’ afforded a new trader that such new trader will EVENTUALLY use to ‘hang themselves’. These forums are FULL of ‘war stories’ of traders who have traded ‘like champions’ for months only to blow an account on one or two trades because the said ‘rope’ was there and they decided, most times for no good or any explicable reason, to ‘hang themselves’ on that day or trade. The ‘war story’ is ALWAYS the same. ‘I was doing great but then over traded my account one day and now I have to start again’. THAT is ‘high leverage in top form’. It is a ‘mechanism’ put into place to ‘prey’ on the innate human attribute of greed. And ‘it works like a charm’ (95% of the time apparently).
Now I’m sure by now I’ve MORE than ‘ruffled a few feathers’. And it’s probably going to get worse. But before I continue: this is NOT intended to start an argument or one of those threads that ends up in every member getting ‘flamed’ etc. I’m giving you my personal opinion and point of view based on what I’ve SEEN happen to other inexperienced traders and based ALSO on what I’ve managed to do to MYSELF on at least two occasions in the past three years.
Now I do realise that ‘discipline’ ‘comes into play’. It was noted by someone that people that cannot develop ‘discipline’ or ‘be disciplined’ in their trading should find something else to do. I agree TO A POINT. Trading is not for everyone and some people will NEVER develop the required discipline. But there ARE those that given the CHANCE would, over time, develop the required discipline, and become successful and consistently profitable traders. But BECAUSE of the ‘rope’ they’ve been given: they’ll never get to that point. They’ll either run out of money by ‘wiping out’ a few times (by over trading JUST BECAUSE THEY CAN) and have nothing left to trade with or they’ll just give up and say that this business is a legal ‘con’. See (or care) where I’m coming from???
Now compare Retail Spot FOREX trading with the trading of Futures or Stocks or Commodities in the USA. You CANNOT over trade even if you WANTED TO. You are required to have a minimum AVAILABLE maintenance margin for day trading and a (higher) overnight margin requirement (assuming you want to carry positions overnight). If your maintenance or overnight margin drops below the required minimum the only things you can do is hold on to your current positions, close them, or put more money into your account. You cannot open MORE positions in the HOPE that THOSE positions will offset your current losses and you cannot HEDGE those positions either to offset and free up margin in use and then carry on trading (and inevitably end up in an ever BIGGER ‘mess’).
Now I’ve ALSO seen a post where it was noted that FOREX trading is regulated in the USA and this is unfair etc. but somebody can take their last cent and go and throw it all away at a casino and there is no problem with that. That’s (probably) true. But here’s the difference (and also my opinion on what you have to say about the ‘Disclaimers’ TalonD): when somebody goes to a casino they KNOW they’re going to gamble and they KNOW that there is every chance that they’re either going to win or lose and for the most part they even know that the ‘odds’ are stacked in favour of the casino. THIS business is NOT, IN SPITE of the ‘Disclaimers’, ‘sold’ to the unsuspecting as such. Read MOST FOREX advertisements. Almost all of them will go something along the lines of ‘start with $100 and make a fortune because with $100 USD and because of LEVERAGE you can control VAST amounts of currency that you otherwise would not be able to’ or the other ‘classics’ of ‘I started with broker X, with only $100, and now, six months later, I’ve just bought my first sportscar’ (in this case it is usually a picture of some gorgeous ‘skirt’ in the ad climbing into her new sports car). The ‘Disclaimers’ to which you refer TalonD are normally relegated to the ‘tiniest and hard to find place’ on the page, using the smallest possible displayable font, and are WAY overshadowed by the ‘promises’ of ‘easy and quick riches’. I’m not saying that this business is gambling (and don’t wish to start THAT debate again). But it CAN be gambling to the uninformed and unsuspecting without them even knowing it.
The point I’m trying to make is that leverage in the hands of a disciplined and experienced trader is not a problem. But there are (evidently) very few people that make it that far and leverage is but ONE reason for this in my opinion.
And as I’ve noted: leverage or no leverage. Without a decent trading system or trading methodology you’re STILL not going to make money. But with little to no leverage it will ‘slow the process down’ and give a new trader time to sit back and think about what it is that they’re doing, why they’re not profitable, and ‘fix’ whatever necessary. High leverage doesn’t afford a new trader that ‘stop gap’ (for want of a better word).
In closing: it’s also strange to me that the only people that have issues with the NFA, CFTC, Dodd-Frank, or any other piece of legislation, are FOREX traders with little to no money to ‘play’ with (I’m not saying this to be the case with anyone in particular that’s contributed to this thread by the way because I don’t know but I’m making an assumption that this will apply to most others). Alright: apparently ONE consequence of Dodd-Frank is that it makes ‘the cost of doing business’ (for the banks and hedge funds and the like) more ‘expensive’. Well they can afford it in my opinion so I don’t really care about that side of things or their ‘plight’. It apparently makes it more ‘difficult’ to do business (because NOW they’re not ‘left to their own devices’). Again: no pity there. It’s BECAUSE they were ‘left to their own devices’ that we ALL landed up in the ‘mess’ that we’re in in the first place (which IRONICALLY comes RIGHT BACK DOWN TO THE ABUNDANCE OF EASY CREDIT THAT WAS AVAILABLE three years ago to everyone).
I’m really interested in this subject and feel strongly about it (for a variety of reasons). I sincerely hope that this thread will be continued and contributed to on a courteous basis. It’s NOT my intention to upset anybody I assure you.
I have no doubt that a lot of brokers and EA sellers are doing their best to lead clueless noobies down the primrose path to ruin. But I still think if you’re adult enough to open an account and try this business then you ought to be able to try and trade it anyway you see fit. Every one has read about the so called 95% failure rate so everyone should have some concept of how risky it can be.
There’s just something in my personality that abhors any kind of restrictions or restraints on what I can do. Can’t help it, I was born that way.
well anyway, I’m not in the 5% club yet but will be. 100% confident of that. So who ever is on the other side of my trades and whatever leverage they are using… better luck next time… so long and thanks for all the fish.
Not to differ with you but rather to just pass a comments on one or two things:
The 95%??? To be honest I’m not ENTIRELY sure of the accuracy of that figure by the way i.e. it’s ‘generally accepted’ but Deltastock’s ‘average’ is around 70%. Be that as it may: that still better ‘odds’ than that of a casino operator and I DO swear on everything near and dear to me that Deltastock does NOT ‘pull moves’ on clients. So I can imagine the percentage to be higher at ‘bucketshops’ of course. BUT: purely because of human nature not matter HOW ‘stark’ the ‘warning signs’ human beings have a tendency to ‘underplay them’ (for want of a better description). They WANT to believe the facts are wrong. Therefore those percentages don’t ‘carry as much weight’ as one would expect not even to the most intelligent and financially ‘savvy’ individual.
There is something in my personality too that makes me not too dissimilar to you believe it or not. But I DO believe that in ANY given situation (whether it be trading or any other endeavour): TOO MUCH ‘freedom and liberty’ is not a good thing FOR MOST (95%???). I believe that most need some clearly defined boundaries in order to ‘save themselves from themselves’.
Leverage is very important to a certain percentage of “traders”, as I discovered in journey into trading.
Those are the ones that “bucket-shop” brokers prey on, hundreds or thousands of people with a few hundred dollars wanting to make a fortune from the very thing that was created to take their money in exchange for an opportunity to dream.
I kept seeing this mentality all over the net, I myself could’ve once had this mentality, mainly thanks to “cookies” and google ads. (If you don’t know what I mean, look it up & discover why certain things just pop-up regardless of what you doing on the net.)
Forex trading has become the trap & one of it’s best lures is leverage! Sucking in people like a line fishing boat, continuously throwing in lines(google ads) with leverage attached to the ends of the hooks as bait. With this combo the fish(innocent/ignorant people) cannot help but bite onto those hooks with everything they have…
I myself have moved away from this mindset & way of thinking and changed the forums I now read. When you look at forums where you need at least $10 000 to start trading like they trading, with no short cuts, no magical indicators, hundreds if not thousands of hours of learning, things change a lot. Your mind says, how can this be right, “google ads” & other forums don’t say such things, this has to be BS.
As most new people look at what this forum or individuals are telling them about what it takes to succeed & just leave, as there are thousands of other forums that will help them turn their few hundred dollars into millions of dollars in the shortest space of time, & all this will happen with the help of a retail “forex broker” offering the most leverage. LOL!! With that mentality we have the 95% - 5% failure to success ratio.
Question: Can leverage be a good thing? Answer: Yes, as bait.
PS. I’m not here to sell anything or take any of you anywhere, thanks for the link Dale.
Thanks for what ‘link’??? (Sorry: just as a matte of interest i.e. I’m not aware of any links I posted on THIS thread anyway).
I have to say that I agree with just about everything you have said. No question about it. I mean to say (if you want to ‘joke’ about it): it’s like being made the ‘promise of the possibility of opening a Berkshire Hathaway with $100’!!! LOL!!!
And I’ll tell you something ELSE that hasn’t even FEATURED here (and whether or not this played any part in the US regulatory process I’m not sure):
Scam (ONLY possible or worthwhile with HUGE leverage and hedging capabilities):[LIST=|INDENT=1]
[li]PAMM/MAM Accounts (a few hundred).[/li][li]Fund Manager opens HUGE trades (possible only because of HUGE leverage).[/li][li]Fund Manager hedges such HUGE trades immediately (possible ONLY because of hedging capability)[/li][li]Fund Manager makes commissions on each HUGE trade opened and closed as detailed above.[/li][li]Clients make nor lose money no matter which way the market moves.[/li][li]Clients only lose the spread on each trade (commissions to Fund Manager paid from spread and worse still broker makes money on the spread too).[/li][li]Clients pay the spread.[/li][li]Rinse and Repeat until Clients gets ‘wise’ (which normally takes a LONG time during which time MANY MANY trades have been opened and closed and LOADS of commissions have been generated).[/li][/LIST]Off topic??? Maybe. But a fine example of what’s possible. And believe me: there are VERY few brokers that would not ‘turn a blind eye’ to this practise. VERY few.
But I guess my point is (and I’ve noted this MANY times): leverage really shouldn’t be a consideration for an experienced and disciplined trader. There’s no doubt in my mind about that. But there are very few of those around. And somewhere ‘in the middle’ there as experienced traders, disciplined enough to STAY disciplined for a long and reasonable period of time, and then go and ‘screw it all up’ ‘just because they can’ (‘rope’). I STILL fall into this last category (well: ‘have fallen’ into this last category on at least two occasions in the past two to three years). So what chance does a ‘brand shiny new trader’ stand???
And one other thing that even I have forgotten to mention (but has been noted by MANY others on these VERY forums): professional traders trade with VERY little leverage (if any). I wonder why that is??? Ya think it could be because they don’t know that they could be trading a billion dollars with their capital on hand as opposed to being able to only trade with what they’ve got??? I dunno but somehow I doubt that’s the reason.
The problem here REALLY though is twofold: leverage (in the hands of the inexperienced) and the freedom to do what you please with your own money. Unfortunately: it would appear that the two are mutually exclusive for the most part.
And I was thinking about this thread earlier and the ‘disclaimers’. Take a look at Oanda’s banner ad that they’ve got going RIGHT NOW!!! LOL!!! ‘Trading FOREX is risky and not suitable for all’!!! Well: how do I (or any new trader or any OTHER trader with a bit of experience) know if I’m an ‘all’ or not??? LOL!!! Nah. MORE regulation is required. NOT less. ‘Model’ the trading of Spot FOREX on that of the Stocks and Futures model and then we’re talking ‘fair play’.
But that’s not going to happen. So if any new trader has bothered to read this thread this far: make 100% SURE that you understand what leverage IS and what the possible ramification of using the maximum possible leverage on offer IS before committing one single cent. If you don’t. Ask. If you still don’t understand. Ask again. There are two things in this business that will ensure that you fail and the odd thing is that they are inextricably linked. Being uncapitalised and not being able to manage risk. High leverage, ironically and ‘at face value’, APPEARS to solve both these problems!!! Until you start trading!!! LOL!!!
Forex trading is a business.
Business ventures should be undertaken by businessmen.
A businessman (or better: businessperson) is somebody who understands what s/he is doing.
And, just to make myself unpopular, anybody entering into a business without having obtained all necessary information pertaining to that business, doesn’t deserve pity or mercy.
I’m tired of people complaining about losses because they haven’t bothered to read the rules, no matter how well ‘hidden’ or how small the font. Those are the same people who sign up for fire insurance and then whine about not being paid after having had a BBQ in their living rooms.
Every website has a site map, and every person with an IQ over 50 can find every relevant piece of information on any website easily.
[B]RTFM[/B] and know what you’re about, and you’ll know how to use leverage or any other tool to your advantage.
Act blindly (and dumb) and … thanks for the liquidity.
Okay, I’m ready for enraged members calling me names … bring it on.
Of course, and why should they bother?
It is not their job to protect people from being stupid. Their job is providing access for retail traders to the markets.
Anybody investing her/his hard-earned money is responsible for her/himself.
If somebody can’t be bothered to take the few hours it takes to educate oneself (internet makes that so easy), let her/him deposit the money into a savings account … of course, for much smaller gains.
It is greed that gets people into situations where they can be fleeced.
Well, if you’re greedy, at least be smart about it.
Because we’re friends: we have the right to differ right??? LOL!!!
The point is this:
The business of trading is NOT the same as deciding to open, say, a fast food outlet. Someone that decides to do that has (hopefully) thought it through, ‘run the numbers’, and decided (or have worked out) that they can make some money. There’s a BIG difference between THAT and having ‘in your face’ advertising ‘riches beyond your comprehension’ starting with only $100!!! Let’s EVEN forget about TRADING here for a minute. How many people do YOU know, who have good credit ratings, will turn down an offer for a PRE-APPROVED credit card with, say, a $10 000 limit on it??? I don’t know many (if any and that includes me). Somehow: the human mind has the ‘knack’ of being able ‘play down’ the negative and ignore reality i.e. “well I cannot REALLY afford another credit card BUT I’m sure I’ll be able to make a plan because the extra monthly repayment is ONLY going to be another $99.99 and I can go out and buy that brand new LED TV that I’ve been looking to buy NOW”’???
Sorry: SAME thing!!! LOL!!! Or rather: ‘two different animals’. For that matter: how many people do you know read the fine print on a contract of ANY kind??? So ‘average new trader Joe’ is expected to IGNORE all these ads, read and study everything there is to know about the business of trading (right up until the last page of the Internet), TRULY understand the ramifications of what CAN happen, NOT allow greed to ‘creep in’, you get the picture. IMPOSSIBLE for most people. Hence: MOST people NEED to be ‘protected from themselves’ in my opinion.
Yes, that is exactly what ‘average new trader Joe’ is supposed to do.
It’s a business venture.
And if he buys that brand new TV with the credit card he cannot afford, he’s supposed to read the TV’s manual too, before using it.
Hehe, of course we have the right to differ.
Imagine how boring live would be if everybody had the same opinion about everything … it would make forums like this one here obsolete.
lol, and having the same opinion about everything isn’t a functional system anyway … just ask some old men in Moscow about that.
Cheers,
O.
P.S.: Man, I must be having a really bad day … I’ve published three or four really rude posts in different threads over the last hour, hehe.
as a newbie i do sometimes use biased reasoning to come up with reasons why i should use high “actual” leverage because it’s just that tempting. sometimes i wonder, if i’m not using high leverage then what’s the point of spending so much time and energy on forex, if i can only make tiny amounts. however, in an article i read on goforex the author says you can make good money with low leverage.