High leverage isn’t suitable at all.
The important point to understand clearly is that no broker offering leverage anything like as high as that can be properly regulated (because proper regulators are not allowed, by law, to regulate “brokers” offering that. For good reasons!).
Once people understand that, and its significance, the rest of the “leverage questions” more or less disappear.
These posts/threads will help you with everything you’re asking about, above (just click on the green links) -
i think (in fact i know) that they’re “brokers” who have chosen either to be unregulated, or to be “pretend-regulated” by “soft” regulators unable and/or unwilling to protect the customers of the broker
there are good and valid reasons why brokers regulated by the regulators in Europe, Australia and America aren’t allowed to offer very high leverage
personally, i wouldn’t touch a “broker” not regulated by FCA or ASIC, and i’d strongly advise you to do the same
even brokers regulated by the c…
In the US, regulated brokers are not allowed to offer more than 1:50 leverage.
In Australia and Europe, it’s 1:30.
Using higher leverage than that is a way to lose money more quickly. Offshore brokers who want most of the customers to lose quickly rather than slowly may choose to be unregulated or “regulated” in a country where the “regulators” are fake/pretend ones who don’t really protect the customers at all.
In the US, they’re not allowed to do that.
In some of Europe they can, so there …
Two main reasons:
They’re gamblers who just don’t understand how forex trading really works;
They don’t appreciate that a broker offering leverage like that can’t possibly, by definition, be adequately regulated, or why that matters so much - and some of them, even when several experts explain it to them clearly and in detail and with plenty of supporting evidence, will still not acknowledge it!
Nobody knows.
This information isn’t available.
Most brokers are either completely unregulated or regulated only as a pretense by regulators who don’t limit permitted leverage at all.
There’s a huge turnover of traders and accounts with high leverage.
They’re mostly gamblers, not traders, so it doesn’t mean anything.
Among successful traders, a very small minority, the average might be between 30/1 (Europe and Australian regulators) and 50/1 (USA).
But that’s such a small minority of peop…
Nobody knows.
This information isn’t available.
Most brokers are either completely unregulated or regulated only as a pretense by regulators who don’t limit permitted leverage at all.
There’s a huge turnover of traders and accounts with high leverage.
They’re mostly gamblers, not traders, so it doesn’t mean anything.
Among successful traders, a very small minority, the average might be between 30/1 (Europe and Australian regulators) and 50/1 (USA).
But that’s such a small minority of peop…
absolutely! this is what demo accounts are for (and what beginners’ forums are for, too!)
hope i didn’t come across as “critical,” in my replies above
Exactly. Undercapitalization and impatience, in practice, go together. Not really a great surprise?
Exactly.
But only at the cost of trading against a “broker” that isn’t properly regulated, which is madness.
Properly regulated brokers aren’t allowed to offer their customers high leverage, and for good reasons, so if you’re using high leverage, the one certainty is that you’re trading on an account that isn’t properly regulated.
It’s a really simple, basic, fundamental point, but it’s als…
This is absolutely right: we do, and it is.
But the most important and relevant thing for people to know in this context, Amy, is that a broker who is giving you 1:3,000 leverage is one who has deliberately decided to prevent their customers’ accounts from being regulated by a real regulator with any realistic power or influence.
From that starting position, we can then each decide for ourselves whether or not that matters to us.
If it doesn’t, then fair enough: it doesn’t, but I hope we can…
5 Likes
