@Mapex4X I think higher leverage lets you better manage your risk.
Lets take a mathematical example
Say you have two accounts each with 10K USD. Account 1 has 10X leverage and Account 2 has 100X leverage. Both the accounts have margin call at 70% and position closeout at 50%.
Now lets say you buy 1 standard lot of EUR/USD in both Account1 and Account2. Mathematically speaking, you have the exact same risk and risk capital in both the accounts.
After the above trade, In Account 1 your free margin will be 0% and in Account 2 your free margin will be 900%.
Now lets assume, EURUSD goes down by 300 pips. You are loosing 3000 USD on your trade both in Account 1 and Account 2.
In Account 1 you will get a margin call but in Account 2, your portfolio is intact and you can continue to hold your positions.
Now lets say EURUSD goes down furhter 200 pips. In that situation, you will be loosing $5000 in both Account 1 and Account 2. Your free margin in Account 1 will be -50% and in Account 2 will be 400%.
At this point, your Account 1 will hit a margin call and your positions will be closed out by your broker of Account 1. BUT in Account 2, there will be no change to your portfolio and your positions stay untouched.
So essentially you are going to have to fund your account or risk close out of positions pre-maturely in Account 1 while in Account 2, you not only can carry on with your positions but can also add more positions if you wish to double down or diversify.
Essentially, the more the leverage, the better it is for your portfolio “Assuming” that you will not abuse the leverage. By Abuse of leverage I mean, that technically, you can only open 1 standard lot in Account 1 but you can open 10 standard lots in Account 2. And in that case, if EURUSD goes down by 100 pips, your Account 2 will wipe out while Account 1 will stay in tact.
The issue is that regulators assume that the forex traders are dumb and will always open 10 standard lots instead of 1 if given the choice and hence should have the leverage down to 10X instead of 100X. This might be true for amatures or start-up traders, but is almost always wrong for educated / pro traders. And almost always inevitably end ou making it difficult for forex traders to make right bang for the buck. Plus, forex is an OTC market and regulators like exchanges more than OTC because there are more fees, more taxes and more control on what can be traded as opposed to OTC market.
In the end, if we can pay higher taxes and smoke as much cigarettes as we want, even though we know its bad for health then Why can we not make our own decision on our trading leverage ?