Hello all,
Just a quick question, is there a restriction on how long you can keep a position open, whilst using leverage.
I’m aware of the carry trade and the possible gains/losses which occur due to the interest rate differential.
But asides from that, is there any costs involved with keeping a position open for a longer period of time using leverage? or any restrictions on the amount of time you can use leverage per trade.
Thanks in advance.
Other than the carry trade/swap rate, there are no more charges for using leverage.
Why? Because the only money at risk is yours. There’s no other money at stake, or in use other than your money.
Thank You =)
u can keep using leverage and open as much and as long as you like as long as you dont get margin called
Focus on lot sizing not leveraging, your account balance will be affected either positively or negatively by the lots you choose to use not necessarily leverage.
For a $100 account, You can use up the whole 500-1 leverage your broker offers and your lot size is 0.01(micro lots), you will still be practicing good position sizing and your account will not be affected.
Brokers just want you to trade higher lots with very little money of your own that’s why leveraging was introduced, normally you would not be able to trade 1.00(standard lots)lots with $100 account but with leverage you can do it. Kiss your $100 goodbye with just one trade gone wrong when you use high leverage + high lots size
Thank you very much for your replies and advice.