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High Leverage vs Low Leverage

  • Post #1
  • Quote
  • First Post: Jun 23, 2015 7:52am Jun 23, 2015 7:52am
Hi all,

Discuss about LEVERAGE.
Some say: High leverage is NOT good. The others say: high leverage is OK.

So, what is better?

Regards,
The one that works for you.
High leverage, just so you can use it when you need to, or to allow for more drawdown
  • Post #4
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  • Edited at 8:33am Jun 23, 2015 8:23am | Edited at 8:33am
1. If you're risking a lot and trading with high leverage so it cost you much more and your broker earns a lot

2. if you're trading without stoploss - use no leverage

3. if you use high leverage - always use stoploss and risk accordingly to your account balance. In that case you must have robust system, patience, discipline of course.

4. the third point will take you to another level of trading experience

choose what you like

good luck
If (a) you have a method with a proven edge, and (b) you use position-sizing appropriate to the size of your account and the risk-factors involved, then it makes absolutely no difference at all how much or little leverage you use.

(Granted, for 95%+ of retail traders, those are two very big "ifs"!).
Low leverage is ALWAYS better and I'll give a good example.

If your account loses 50%, it requires a 100% gain to break even. If your account loses 10%, it requires just an 11.1% gain to break even.
Keep you leverage ratio 10:1 or less
You may get 100:1 or 1000:1 best is 10:1 as standard.

As leverage get increase, then increase your trading capital, to keep leverage down.
http://www.forexfactory.com/showthre...53#post8318753
Prachait Saxena
depend..

if the setup is good....go with full margin because u will never meet it again..

if u not sure about market...go with control margin..low leverage

so...set with high margin..but control it depend on your god like insane...
because the high leverage will allow to control the size of position that u want to make..
Leverage is great until you have something worth keeping.
one day ...if u meet the market that 100% will follow what the majority want...

u must not to miss it...

full margin!!!!!!!!!!!!!
I am sorry, friends. I am still confused.

For making our discussion not so wide, I put some conditions as following:
1). equity USD 20,000.-
2). The probability of system to win about 60%.
3). Trade Time Frame H1

What is better the leverage 1:400 or 1:10 or no leverage?

Please advice.

Thanks,
Anton
Quoting antonsatu
I am sorry, friends. I am still confused. For making our discussion not so wide, I put some conditions as following: 1). equity USD 20,000.- 2). The probability of system to win about 60%. 3). Trade Time Frame H1 What is better the leverage 1:400 or 1:10 or no leverage? Please advice. Thanks, Anton
No leverage has the highest ROI percentage wise. I would look at your probability of system to win again because there are HFT firms making millions of trades a day trying to get an average of a fraction of a pip in profit on a trade. So if you really want to trade Forex (you should probably buy stocks instead), you should get a position equivalent to your $20,000 and try to predict what'll happen in the long term.
Quoting antonsatu
I am sorry, friends. I am still confused. For making our discussion not so wide, I put some conditions as following: 1). equity USD 20,000.- 2). The probability of system to win about 60%. 3). Trade Time Frame H1 What is better the leverage 1:400 or 1:10 or no leverage? Please advice. Thanks, Anton
If you don't understand "what, how and why" about leverage, your question has no meaning. Please learn about leverage first and then you'll know the answer to your question.
Quoting Nfp
depend.. if the setup is good....go with full margin because u will never meet it again.. if u not sure about market...go with control margin..low leverage so...set with high margin..but control it depend on your god like insane...
good advice
hahhhh.....

Hallo master trader,
Please help to advice clearer. All the above replies are "relatives" opinions (but thanks, anyway).

Regards,
Does Leverage increase your risk?
- Depends on your money management and position sizing.

High Leverage + Poor money management = Bust account
Low Leverage + poor money management = you survive a little longer

High Leverage + Good money Management(Variable in size) = Yields the fastest growth
Low leverage + Good money management(Variable in size) = Steady growth

High Leverage + Good Money management (Fix size ) = Low Leverage + Good money management (Fix size)

When does leverage give you an edge?
high leverage = means lesser money is needed to open per size trade = More free margin available
However , the edge only happen if you trade the same as when you are on low leverage (means keeping your free margin level to a high percentage and don't overtrade)

Why most high leverage fails?
Greeds. People often oversize in trading and no proper money management and most properly due to low capital.

Hope this post will help.
Life is a game. Money is how we keep scores. Add me as friend (:
For real - bigger leverage can help you to take bigger lot size. Other depends on your greed
In America it can be only 50:1... So what?))
Depends on the accuracy of your entries. If you need 50 Pips to distinguish a good trade from a bad one chances are that high leverage will kill you (well, not literally you, but your account ). I'm VERY comfortable with around 100:1 on a 1 or 2 Minute chart. (Effective) Leverage simply defines how many Pips will double or kill your account, that's all.
lol i dont believe in something called "Over leverage" what i believe is "Over Lot" or "Over Size"

More leverage means you get less margin requirement and more free money , it will always good for us as a trader

High leverage should not trader problem, it should be broker problem not us

Instead worrying about how many leverage do you should use, why you dont start to use highest leverage you could obtain and start finding perfect lot for your trading?
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