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Australian brokers and leverage restriction

  • #41
  • Oct 16, 2019 7:31pm Oct 16, 2019 7:31pm
Quoting Starcraftmaz
{quote} Who's your broker?
You may check with IG
  • #42
  • Oct 16, 2019 7:44pm Oct 16, 2019 7:44pm
Quoting xtradex
{quote} Thats only the case in theory. The higher leverage you are using, the more stressful trading is and results will not be the same. And if you are really using 1:200 regularly, you have probably blown a few accounts already. That kind of leverage is completely unneccessary and everyone will be better off when they tighten the restrictions.
Absolutely not true. I've been offshore with high leverage for years. I have the same capital available for trading, I just prefer it sit in my FDIC insured bank account (I'm in US). So I execute the same trade with 1/10 of the margin I would need with a 50:1 US broker, the rest of my trading capital (the other 90%) sits securely in my bank account, I move it when and if I need it. Leverage does not increase or decrease risk it simply requires you to put up more (unnecessary) funds with the broker.
  • #43
  • Oct 16, 2019 8:12pm Oct 16, 2019 8:12pm
leverage of 20:1 or lower is good for most of traders.
why people hate that??
each day 10%,,,, https://www.forexfactory.com/thread/1371538
  • #44
  • Oct 16, 2019 8:28pm Oct 16, 2019 8:28pm
Quoting Macd-rsi
leverage of 20:1 or lower is good for most of traders. why people hate that??
I think because it will not take very much DD for broker to close your trades.
  • #45
  • Oct 16, 2019 8:31pm Oct 16, 2019 8:31pm
Quoting cfudge
{quote} I think because it will not take very much DD for broker to close your trades.
But math say "the opposite is true" especially if StopOutLevel is 50% or below
what you say not correct. not true.

with leverage of 10%, for one position only with interactive broker, i convert 2000 USD to 7,000 USD. USDZAR. (long swing target)

AND IF YOU ASSUME HITTING MARGIN CALL POINT, low leverage mean no great loss!
the number of lossers will drop heavily.
each day 10%,,,, https://www.forexfactory.com/thread/1371538
  • #46
  • Oct 16, 2019 9:09pm Oct 16, 2019 9:09pm
Quoting Macd-rsi
leverage of 20:1 or lower is good for most of traders. why people hate that??
Simple math. Let's assume one has 50,000 of "trading capital". Trading standard lots of 100k would be 2:1 leverage. If i use a 500:1 broker and use 100 pip stop, I only need $200 to open the trade, but $1,000 to cover the 100 pips I'm risking. With a 20:1 broker, I need $5,000 just to open the trade. Why would I wish to put $5K with broker when I'm only risking 1K. Now let's say I have 4 trades open all same standard lot with 100 pip stop, I put in 4k with my 500;1 broker, I need 20K just to open 4 standard lot positions with 20:1 broker. I still have the same amount of trading capital as the trader with the 20:1 broker. My capital just sits in my bank account as opposed to the broker account. These numbers are for illustration, but what I'm saying is I use 2:1 on my actual trading capital although I'm using much higher leverage of what I actual have on deposit with broker. Still risking the same and using the same leverage of my actual capital as the trader with the 20:1 account. It's really a matter of where you want your money parked.
  • #47
  • Oct 16, 2019 9:39pm Oct 16, 2019 9:39pm
Quoting Macd-rsi
leverage of 20:1 or lower is good for most of traders. why people hate that??
If it were good, they wouldn't have to enforce it through regulations - traders would already preference that margin level.

If it were good, brokers wouldn't be spending the money and trouble to set up in foreign jurisdictions.

If it were good, traders wouldn't be gambling with offshore brokers.

My trading capital is usually 5k-10k, I can't even take 1 lot with that, and I usually have many lots open at once, and trading in multiple markets.
  • #48
  • Oct 16, 2019 10:00pm Oct 16, 2019 10:00pm
20:1 is suitable for me ,but some traders prefer a big leverage,like exness,it is up to 2000:1 but with such a high leverage they will limit your capital under 1000 USD,more capital means lower leverage
  • #49
  • Oct 16, 2019 10:12pm Oct 16, 2019 10:12pm
Quoting Starcraftmaz
I can't even take 1 lot with that, and I usually have many lots open at once,
you can maximize the leverage following clever way,
for example if you want to enter EURUSD Buy 2 lot, but your balance is 5K, SO MAXIMUM POSSIBLE 1 LOT!
get sell 1 lot then get buy 2 lot(net 1 lot buy) then close the sell. net become 2 lot === calculated leverage = 40:1 instead of 20:1
each day 10%,,,, https://www.forexfactory.com/thread/1371538
  • #50
  • Oct 16, 2019 10:14pm Oct 16, 2019 10:14pm
the rule also valid for 500:1---you can deliberately make it 1000:1 or 800:1
=
pipmaster77
I know brother what you say, but vast majority of traders can not control themselves. These rules "control" them
each day 10%,,,, https://www.forexfactory.com/thread/1371538
  • #51
  • Oct 16, 2019 11:04pm Oct 16, 2019 11:04pm
Quoting Macd-rsi
{quote} you can maximize the leverage following clever way, for example if you want to enter EURUSD Buy 2 lot, but your balance is 5K, SO MAXIMUM POSSIBLE 1 LOT! get sell 1 lot then get buy 2 lot(net 1 lot buy) then close the sell. net become 2 lot === calculated leverage = 40:1 instead of 20:1
Idk what broker you are using, but most won't allow this - they will not allow you to close the sell 1 because it will result in a margin level that's below your equity.
  • #52
  • Oct 16, 2019 11:32pm Oct 16, 2019 11:32pm
Quoting Starcraftmaz
{quote} Idk what broker you are using, but most won't allow this - they will not allow you to close the sell 1 because it will result in a margin level that's below your equity.
no,
try it with any brokers with stop out 50% or below, like most of Australian brokers.
it work and legal
assume it 2 different positions
each day 10%,,,, https://www.forexfactory.com/thread/1371538
  • #53
  • Oct 16, 2019 11:34pm Oct 16, 2019 11:34pm
the margin level itself you have to understand its philosophy
the rule is: if equity/margin rarch stopLevel, then margin call is initiated.
when doing so, there is some distance in pips before margin call
with very low leverage, ths distance may be 120 pips


great advantage is when margin call hit, your remaining balance almost big!
each day 10%,,,, https://www.forexfactory.com/thread/1371538
  • #54
  • Last Post: Oct 16, 2019 11:35pm Oct 16, 2019 11:35pm
I may explained in detail with math equations and verifications in my thread "Trade All"

through equation you can decide for example 700:1
each day 10%,,,, https://www.forexfactory.com/thread/1371538
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