How do i avoid using too much leverage

Beginner Questions
1

Hello everyone
How much leverage can one use on an account less than $100?

2

Try using 20:1, on a micro lot that is, so u can by 2000 on a 2 micro lots

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3

Sorry but I can’t give much advice on your situation but I have heard of forex accounts called cent accounts. I believe they allow you to trade down to approximately 1c per pip. If I were you, I would begin with researching such accounts.

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4

Ooh. :open_mouth: Leverage can be a bit tricky but it’s super important to understand. :open_mouth: I’d try to discuss more about it but I feel like I’d only make it confusing. :sweat_smile: I guess, instead, you can try reading the lessons under “The Number One Cause of Death of Forex Traders.”

https://www.babypips.com/learn/forex/undergraduate-senior#the-number-1-cause-of-death-of-forex-traders

5

That’s what i had in mind
Thanks for the advice

7

Thanks
I will check them out

8

@ria_rose
I have done my reasearch on leverage.

I guess the question i should be asking is how much leverage can i use if i plan on trading a 0.01 lot size on an account less than $100

9

If you have a $100 account, and your position size is 0.01 lot, the leverage you are using is already pre-determined. You’ve established the amount of leverage you are using, depending on the currency pair you are trading, and it’s no longer a matter of choice.

  • If you are trading any pair of the form USD/XXX, then you are using 10:1 leverage, because the notional value of your position (0.01 lot) is $1,000, and that’s 10 times the size of your $100 account. If your account is less than $100 (as you indicated in your post), then you will be using more than 10:1 actual leverage.
  • If you are trading any pair of the form GBP/XXX, then you are using about 13:1 leverage, because the notional value of your position is about $1,300 (at the current GBP/USD price), and that’s 13 times the size of your account. If your account is less than $100, then you will be using more than 13:1 actual leverage.
  • If you are trading any pair of the form NZD/XXX, then you are using about 6.6:1 leverage, because the notional value of your position is about $660 (at the current NZD/USD price), and that’s 6.6 times the size of your account. If your account is less than $100, then you will be using more than 6.6:1 actual leverage.
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10

Leverage depend on your money and risk management. I generally use 1:50 leverage. But I try several high leverage ratios in demo account. Unfortunately, I blow my account several time.

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11

I know how much leverage i will use
Thanks🙏

12

With time and patience will make it🤝

13

just use a % base risk on any trade, and u don t really have to care about leverage, altho for such a small account having as much leverage as possible would be advised if u wanna grow that 100 bucks. i guess not many people have an idea about trading without leverage, which is tedious and frustrating from a growth perspective unless u have quite a big account.
as long as u have good risk management, and u set ur % in risk u should care about following ur plan, trade idea, trade management.
cheers

14

Just remember that the higher the leverage you use the less there is room for an error in your strategy. A few losing trades and you find that a big chunk of your funds is wiped out.

15
You need to calculate your risks and use leverage only if the potential profits outdo the risks.