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High leverage vs Low leverage 68 replies

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What leverage is best for a newbie?

James , you avoided leverage as a newcomer it’s your matter. But obviously leverage is an inevitable part of trading which can be supportive to make profit very rapidly if there is real money managing plan. So we can’t avoid it.
Despite of good money managing skill ,
leverage can be harmful .
because the market is too much volatile and there is nothing 100% in here.
When leverage works, it magnifies your gains substantially. Your head gets big and you think you’re the greatest trader that has ever lived. But leverage can also work against you. The more leverage you use, the less “breathing room” you have for the market to move before a margin call. Low leverage with proper capitalization allows you to realize losses that are very small which not only lets you sleep at night, but allows you to trade another day.
It is not really about your account nominal leverage, instead it is about how much of this leverage are you going to use. For me, if your capital is 1000 USD and you are a newbie, it is not wise to have more than 0.1 Standard lot opened for all of your trades combined.
Quoting MarkFxAnde
As a trader first of all we the newcomers have to understand the basic of leverage ratio so that we can trade with particular money management to get rid of the margin call, for that we have to be very much experienced with the basic knowledge related to the Forex field.
You are right! Clear knowledge is very much important here! But, I see maximum newbies prefer high trading leverage facility although they don’t know the advantage & disadvantages of high trading leverage service! Basically, new traders need to focus on only learning rather than facility!
Quoting GeorgeBaile
{quote} You are right! Clear knowledge is very much important here! But, I see maximum newbies prefer high trading leverage facility although they don’t know the advantage & disadvantages of high trading leverage service! Basically, new traders need to focus on only learning rather than facility!
It’s a part of emotions that cannot control the beginner Forex trader due to lack of exact market principle.
Quoting MitchellMcC
The newcomers always consider high leverage as high risk. actually high leverage as long as trader still wisely using their margin and keep discipline with risk management , high leverage will help you to boosting opportunity , but many beginners they can’t use leverage properly and having tendencies to become greedy and this will like as suicide at short time.
You are right! New Forex traders may lose their momentum so easily because of using high trading leverage! This is way, new traders should work with small trading leverage like 1:50; 1:100. On the other hand, I see overtrading is another common issue by the new traders!
In my view, it’s too much that’s thought about leverage, it’s not that important. It’s certainly useful to have higher leverage, but ultimately you will have to be skillful to go far whether to survive or gain. I use 1.500 leverage, but that’s bit like default setting for me. I like to use highest available leverage, as that is where I feel comfortable, but I know it’s down to my ability to decide for everything not leverage.
Even if your leverage setting is 1000:1 but your real leverage is only 10:1 it's still ok. My leverage setting is 500:1 but my actual is only 10:1 - 25:1 It's the actual leverage you use that matters.

I only increase my leverage when I'm currently in profit and SL already moved to breakeven.
Quoting JimmyChoo
{quote} You are right! New Forex traders may lose their momentum so easily because of using high trading leverage! This is way, new traders should work with small trading leverage like 1:50; 1:100. On the other hand, I see overtrading is another common issue by the new traders!
1:50 is more appropriate for the beginner due to lack of experience making a good trading plan when using leverage. 1:100 leverage sometimes can causes a great trouble when market moves at random. And beginner should avoid over trading and revenge trading for reducing huge losses.
For some reason I am finding that I am running out of leverage. Maybe I don't have a clear concept of what it is, but I feel I should have enough considering my account size. I have over 100k(practice) and try to keep my trades at 1-2% of account size. However I have 2 active trades and can't make a third not sure why that is.




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Wow you better check what is the margin requirement for these exotic pairs with your broker. These are often not offered with high leverage
Yes, 1:1000 trading leverage is much high for the newbie! Because, over trading is a common problem for the new traders, in this case they should trade with a decent trading leverage like 1:50 to 1:100! New traders need to make sure their trading quality rather than trade numbers! On the other hand, high trading lots size is another problem for them! So, high trading leverage can be a cause of their trading loses!
Thanks for the reply. I actually went into my account and saw that my leverage was only 10:1 so I upped it to 50:1. Hopefully that will do the trick. As for exotic pairs, right now I'm using OANDA but the spreads can be pretty large and often widen suddenly during a trade. Are there better options for brokers for these pairs? Is better to get ones with fixed spreads?
In spite of having good risk managing plan higher leverage always contains higher risk ?
Quoting Majeeda
Yes, 1:1000 trading leverage is much high for the newbie! Because, over trading is a common problem for the new traders, in this case they should trade with a decent trading leverage like 1:50 to 1:100! New traders need to make sure their trading quality rather than trade numbers! On the other hand, high trading lots size is another problem for them! So, high trading leverage can be a cause of their trading loses!
1:1000 leverage is too much for pretty much anyone, if you ask me, not just newbies. I don't think professional traders use that kind of leverage either.
Quoting diana91
1:1. Regards, Diana.
It seems not like for the retail Forex traders! I think, 1:100 is the best option! I am trading with this parameter from my 1st day of live trading!
Let's have a look from the other side. What is more risky? To have 10000€ or 1000€ on account?
I will open a trade wth SL 500€ and TP 500€. Why on earth should I have 10000€ on account to open this trade? There are lot of spikes, slippage and trade will not be closed at SL or TP. If I have exactly the amount that I need to open a trade on my account I can not lose more than that, but if I have more I can lose much more. Just remember black swan.
If you know how to use it leverage is great.
This is my view on high leverage.
Quoting Eagle-Eye
Let's have a look from the other side. What is more risky? To have 10000€ or 1000€ on account? I will open a trade wth SL 500€ and TP 500€. Why on earth should I have 10000€ on account to open this trade? There are lot of spikes, slippage and trade will not be closed at SL or TP. If I have exactly the amount that I need to open a trade on my account I can not lose more than that, but if I have more I can lose much more. Just remember black swan. If you know how to use it leverage is great. This is my view on high leverage.
Well, may I know the range of your high trading leverage? I think, traders should follow the money management policies so sincerely if they want to trade securely!
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  • Edited at 9:57am Dec 25, 2017 8:09am | Edited at 9:57am
Quoting DarrenLehma
{quote} Well, may I know the range of your high trading leverage? I think, traders should follow the money management policies so sincerely if they want to trade securely!
You are talking about security. What is more secure. To have 10000€ on account and open trade with 500€ SL or to have 500€ on account with same 500€ SL and 9500€ on side for another trades?
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