Can I enter a forex trade with less capital but same risk if;
I buy $1000 with a leverage of 100:1, required margin of $10 and I buy $1000 with 10:1 & required margin of $100, and stop loss of 30 pips for both?
I will be risking the same for both trades (30pips at $0.1 per pip) but enter the trade that has higher leverage with lower capital.
Yea I came across this same crossroads before too. After making note of the margin required, the stop loss dollar amount (and how it corresponded with my risk %) is how I base my leverage if that makes sense. The lot size and leverage amount doesn’t matter to me long as the risk % and what that risk percentage equates in actual dollars was within my comfort zone.
Hope this helps.
So the “higher leverage means higher risk” only makes sense when the lot size is increased with the leverage. If the lot size remains the same and the leverage is increased, you can enter a trade with less required margin. Is that so?