Like said many times above, If your not a professional trader, with a high strike rate, being consistent over a large period of time, , you should be using no larger then 50:1
anything over, should be exclusively for seasoned veterans ,
Leverage is a byproduct of risk taken per trade as a percentage of account balance. So in all honesty it really doesn’t matter what leverage you may need to employee, as long as your total risk per trade is justifiable.
Typically, a trader would suggest to risk [as an example] 1% on a trade. The leverage required will depend on the size of his ‘stop loss’ and the rate being traded.
With a very short stop the trader is bound to be using a higher degree of leverage as the notional value per pip will be much higher, the same trade but with a wider stop would use less leverage as the notional value per pip would be much lower.
[U]So what does this mean?[/U]
It means that traders do not enter trades asking themselves “what leverage should I use on this trade”, rather they ask “what is the maximum percentage of my account I am willing to risk on this trade”, the leverage required is the byproduct.
To be honest, I am not against on high trading leverage facility! But, it’s true, most of the Forex traders try to misuse this trading facility! Obviously, it’s not possible to make consistently big amount of money only based on high leverage facility, your trading plan and strategy are more important parameter here! So, concentrate on your trading strategy mainly instead of high leverage facility!
Exactly, not that it is bad or anything but we just have to be aware that there is risk attached to using high leverage. So we should definitely be careful with it.
High leverage isn’t that bad if you are good in controlling your money management. It can only cause a problem when you use a very high lot in your trading hoping to get a big win.
Not bad if we have sufficient knowledge and practical experience about forex then we can enjoy this business with high leverage, I also do like to use the high leverage as I can earn reasonable amount with big leverage, keep in mind that I am also trading with big investment.
You miss the peculiarity of people’s personality which is called greed. Leverage allows greed to flourish as it provide means for the person to speed up losing/winning i.e. granted a tiny chance of making 1000 from 100 what he will by all means take advantage of.
Just stick to your pace of trading and don’t change your risk/reward setup unless you gain confidence in what you are doing.
It is bad only when we take the maximum risk and trade greedy mind, if we will do forex with big lot size then high leverage will cause the reason of big loss, so we should avoid using the high leverage, we should use the moderate leverage i.e. 1:500
Mostly traders especially the newcomers consider high leverage as much risk. But according to me I don’t consider it. If there is any risk, it is completely with non-sense planning and zero risk management plans, nothing to do with high leverage at all.
Leverage is like a gas pedal in your car. You aren’t obligated to use all that leverage just like you aren’t obligated to make your car go as fast as possible. Like driving your car too fast, if you use too much leverage, you risk a serious accident.
High/low leverage should be absolute irrelevant, as the skill levels decide if it’s risky or not, if you are skillful then you will be able to do well regardless of the size of the leverage. But if skill level is down then I am sorry but it is impossible to make profits consistently even with high leverage or with low leverage. So the only way forward is to get the skill level right in order to really succeed.