How does leverage work?

How much you will earn by using leverage ,
it depends on your trading balance as well risk managing plan.

As a newcomer in my live account I always use 1:100 leverage which is more appropriate for the newcomers to avoid risk with certainly. In my demo trading I always took high leverage to see the performance how it works.

James
can you make sure how much leverage do you use in demo ?
and how this demo experience help you when live trading ?

Leverage works like this:

I have seen the leverage always works as a killer. Because the traders we have always fall a great loss by using leverage especially when high ration. But sometimes it brings profit very rapidly when there is real trading plan with great risk management approach. Actually forex market is too much risky and volatile. Risk is everywhere and from all trading elements leverage always contains more risk. so before trading with leverage we have to make sure how to manage risk in Fx.

As a retail Forex trader I like to trade with trading leverage facility! But that doesn’t mean, I rely on high trading leverage! In my live trading I use 1:100 leverage according to my trading strategy’s requirement! I rely on my long time trading experience and knowledge!

High leverage in trading CFDs / Forex means, you pay less Margin, thus you could trade bigger Lots or open more positions or hold a bigger drawdown without getting Margin Call / Stop out. It doesn't mean that the tick value changes. If you have a 1:500 leverage and trade only one position with 0.01 Lot, your profit / loss potential is actually the same as having a 1:100 leverage.

Hello fellow members of this site,

I am a new user and I am prohibited to create a new thread. Please help me understand how this leverage exactly works. Never used it before but I am studying cryptocurrencies exchanges and I feel ready to join. Now, those leverages I think they multiply the gain/loss factor directly.

What I think is:
If you open a 10x leverage position with 1 BTC, when the price goes up by 10%, you have 2 BTC. And if it goes down by 10%, you lost everything.

But this is either incorrect, or whaleclub.co is robbing me out of my virtual money on my demo account.
Take a look at this: https://imgur.com/a/nt3l8

1 BTC, x20 leverage. Return = +62%, Return = +0.031 BTC.
How do they calculate this?? It goes 62% up (and with their spread it starts with -25%) and they give only 3% more bitcoins.

Leverage always works according to its own style. If you know how to manage risk for all time, then there is a chance to get good profit by leverage. Otherwise it can make you loser mostly.

i don't think so balance is a big deal to get maximal result by using leverage , its all about good trading plan. so, try to make sure good plaining when using leverage high or low ratio.

Actually leverage is an important financial tool that allows an investor to grow his market exposure to initial investments.

Hello,

Can you tell me what % of my capital should I risk when using leverage X5 and what % profit should be set. I want to trade a pair for at least 1 week. Thank you.

Tony.

its a stuff question to answer , depends on how much you can manage risk and money at the same time.

First of all we have to manage our risk and should take risk according to our balance, high leverage always contains huge risk when trading in live, so before trading in live it is more appropriate to use demo account to see the performance how leverage works.

in spite of having most powerful analyzing trade knowledge there is no chance to avoid risk , every faction in Forex trading contains huge risk , so besides acquiring good knowledge and experience it is more appropriate to ensure risk management.

RM is foremost approach
which we should make before trading,
but sometimes we cant avoid unfortunate risk and losses if there is good risk management.

its all about uncertain issue , nothing without it.

Leverage allows FX traders to increase their position size beyond what they would normally be able to trade. Leverage allows traders to control account sizes that are much larger than their initial deposit amount, but how big it is depends on the level of leverage their broker offers. Using leverage in Forex has many benefits for traders, but it also comes with significant risk.

True and the problem with high leverage is if your strategy is wrong, you lose money and you lose it very quickly as the price moves against you.

Leverage it becomes irrelevant when you simply watch about pips and convert your profit or loss. from there, will calculate the amount that we endure

Leverage in Forex is the ratio of the trader's funds to the size of the broker's credit. In other words, leverage is a borrowed capital to increase the potential returns. The Forex leverage size usually exceeds the invested capital for several times.The size of leverage is not fixed at all companies, and it depends on trading conditions provided by a certain Forex broker.