Higher leverage to AVOID margin calls?

Trading Systems
1

Sometimes,
When considering certain SPs and strategies, sometimes I do my own calculations and see that if I factor in the trader’s maxDD multiplied by 5 or 10 (or more depending how their graph looks) to determine what my equity size should be for the given lot size.

So according to my calculations it should be fine, but when I run the simulation with 100:1 leverage, sometimes I see that there was a margin call and the account would be destroyed.

In situations like that, if I increase the leverage from 100:1 to 400:1 (for example), then the backtest succeeds.

So the conclusion seems to be "higher leverage allows you to avoid margin calls."
What I wonder, is why do people recommend lower leverage?
Why do people say “high leverage can get you into trouble”

From my (new to forex) understanding, high leverage can only get you into trouble if you haven’t allowed for enough drawdown. But if your strategy accurately considers possible drawdowns, high leverage is helpful in getting a high ROI and reducing the chance of a margin call?

2

If you’re account is going to be “destroyed” by a margin call at any level then you’re trading too big. It’s that simple. You don’t want to shift from 100:1 to 200:1 because you’re almost assured that there will be a bigger drawdown out there somewhere and that a position that showed a turn around in testing won’t make that turn.

3

Thanks for the reply.
Well perhaps destroyed is too harsh a term to use, but losing a big chunk of one’s account because the trades got cut short instead of having a chance at riding the downswing is definitely something I want to avoid.
I agree with what you’re saying about trading too big. I will reassess that.

4

I live by the mantra of setting risk before entering a trade, so I can never lose more than 2% on any given trade. Higher risk will put your account at risk and you will need the ability to take quite severe drawdown events. The amount of people here that say that you need to kill a few accounts to become a trader lose that ideology. I have traded live for 3 years now, still on the original account.