Interesting Question regarding leverage and trading style

Ok here�s a predicament:

Does your trading style affect what leverage you should use?


Does your leverage affect your trading style?

Definitely your trading style comes first. You should never have to adjust your trading style because of the leverage you are using. Determine your trading style first. When you can comfortably make positive pips then you can worry about the leverage.

I don�t even know why traders would want high leverage. Brokers always seem to push this but I think you have a lot more flexibility as a trader if you use lower leverage.

Well in response to the leverage comment, I think traders use the leverage because it has the lowest margin requirement. Some people use very high leverage (400:1) for different hedging strategies for the low margin requirements but I agree to some extent that most traders should try to keep their leverage low.

You should find your trading style first. That�s the most important thing. Everything else can be adjusted around that.

I never really think about leverage in and of itself. In risking only 1-3% per trade the leverage, by definition, will be low. Think percent risk, not leverage and life becomes simpler

This is an interesting approach to see things and gain more perspective in the long run, I think. At least what I am reading, gets me more to think in the percentages. Then again, I am still learning the roads to get to the real deal highway of trading!

Pipbull makes a good point. Think in terms of risk exposure and you won’t have to worry about leverage. In my opininon, if you’re a fairly new forex trader, and you’ve demo traded for at least 3 months (right?), only risk .25 - .5% of your trading capital. And not just per trade but for TOTAL RISK EXPOSURE. This will (hopefully) keep you in the game long enough for you to actually start learning how to trade profitably or at the very least, put you in the best position.