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What leverage is best for a newbie?

  • #161
  • Nov 26, 2019 1:05am Nov 26, 2019 1:05am
i tried to understand the importance of money management when using leverage, because from all trading tools in Forex trading only leverage contains huge risk than others , so without MM there is no real chance to keep survive when trading in practical.
  • #162
  • Nov 26, 2019 8:42pm Nov 26, 2019 8:42pm
Money management is necessary because there is a universal truth that money comes hard and goes easy. It takes hard work to make money and it takes almost no effort to spend it.
  • #163
  • Nov 27, 2019 7:49am Nov 27, 2019 7:49am
what you think Mate , there is any different between money and risk management ?
  • #164
  • Dec 6, 2019 9:12pm Dec 6, 2019 9:12pm
i have come into this forum after a long time , hope you all are good. by the way , now come to this point " hajimohosin". i don't think so any major difference between two. both are a ability to handle your trading successfully from unfortunate risk and losses.
  • #165
  • Dec 6, 2019 10:18pm Dec 6, 2019 10:18pm
I think for the newbie traders who wish to trade should start off with just low leverage as much as they can. Maybe 1:10? It is not all only just leverage; money management is a big factor to consider unless you don't mind wasting all the money.
  • #166
  • Dec 6, 2019 10:34pm Dec 6, 2019 10:34pm
when using leverage money management really a big factor ,
but the problem is newcomers dont know how to manage money when trading.

as a result they become loser most of the time.
  • #167
  • Dec 8, 2019 3:11am Dec 8, 2019 3:11am
Quoting HajiMohsin
what you think Mate , there is any different between money and risk management ?
the main issue its all about same ,
MM and risk management is a great skill which always supportive to predict unfortunate risk and losses.
  • #168
  • Jan 1, 2020 3:04am Jan 1, 2020 3:04am
some discord i have ,
its not a thing which is able to calculate loss or risks ,
i think its a skill which is relate after having losses how to handle the situation with successfully.
  • #169
  • Jul 29, 2020 7:37pm Jul 29, 2020 7:37pm
I think if you are still a newbie than you should not start trading with high leverage and we should continue with low leverage. Although with low leverage we can not make high profit but we can learn how to control our emotions with it.
  • #170
  • Jul 29, 2020 10:47pm Jul 29, 2020 10:47pm
Actually if you are manual trading, the leverage doesn't matters too much. You will know the risks before placing the trades.

If you are using those martingale EAs, the leverage does matter. They will open positions when there's enough margin. All these are set by the "MAX LEVELS" at the inputs panel.
  • #171
  • Jul 30, 2020 2:53am Jul 30, 2020 2:53am
I always found it so weird that some newbie actually want to open an account with hoping to have upto 300x or 500x. I do hope they realize that the higher the leverage is, the higher the risk will be. It is a dangerous move and can immediately blow up your account if you make a mistake.
Personally, I think the newbie should stick with 20x or 30x max while taking into consideration of risk management.
  • #172
  • Jul 31, 2020 9:32pm Jul 31, 2020 9:32pm
With such a high leverage u talk about, u actually learn gambling not trading. I recommend between 20 and 30 for beginner. If beginner cant trade on lower leverage then he will definitely blow acc by using high lev.
  • #173
  • Aug 1, 2020 2:44am Aug 1, 2020 2:44am
I don't recommend using leverage, unless you're the best trader in the world, then use 10x leverage
  • #174
  • Aug 7, 2020 3:50am Aug 7, 2020 3:50am
If you are new in this market, you should take decisions very carefully. For the new traders high leverage is very risky because generally, they have low knowledge about forex and it is very risky to take high leverage with low knowledge.
  • #175
  • Aug 7, 2020 4:46am Aug 7, 2020 4:46am
I'm studying leverage and i'm a newbie. I never still use it, but i seek always to see what is the max negative effect for my trade
  • #176
  • Aug 7, 2020 5:50am Aug 7, 2020 5:50am
Quoting GianRik
I'm studying leverage and i'm a newbie. I never still use it, but i seek always to see what is the max negative effect for my trade
Leverage should depend on your stop-loss level (risk), which depends on currency pair volatility and on the trade time horizon.

Example 1
If you have a portfolio of $10,000, with a stop loss that's 0.5% percent away from current prices and you are willing to risk 0.5% of your portfolio then, the size of the trade should be:

Portfolio = 10,000
Currency pair ABC/XYZ= 1.0000
Stop Loss is at= 0.9950 (0.5% below 1.0000), 50 pips away
Amount willing to be risked is = 10,000 * .5% = 50
Amount to be allocated= amount to be risked / Stop Loss %= 50/0.5%=10,000
Leverage= 1:1

Example 2
If you have a portfolio of $25,000, with a stop loss that's .25% percent away from current prices and you are willing to risk 1% of your portfolio then, the size of the trade should be:

Portfolio = 25,000
Currency pair RES/YPA = 2.2
Stop Loss is at= 2.1945 (0.25% below 2.2), 55 pips away
Amount to be risked is = 25,000 * .01 = 250
Amount to be allocated= amount to be risked / Stop Loss % = 250/0.25%= 100,000
Leverage = 4:1

Goodluck.
  • #177
  • Aug 8, 2020 12:50pm Aug 8, 2020 12:50pm
Quoting split_unit
{quote} Leverage should depend on your stop-loss level (risk), which depends on currency pair volatility and on the trade time horizon. Example 1 If you have a portfolio of $10,000, with a stop loss that's 0.5% percent away from current prices and you are willing to risk 0.5% of your portfolio then, the size of the trade should be: Portfolio = 10,000 Currency pair ABC/XYZ= 1.0000 Stop Loss is at= 0.9950 (0.5% below 1.0000), 50 pips away Amount willing to be risked is = 10,000 * .5% = 50 Amount to be allocated= amount to be risked / Stop Loss %=...
Nicely explained.
  • #178
  • Aug 17, 2020 12:28pm Aug 17, 2020 12:28pm
A beginner should use small leverage like 1.50 to 1:100. New traders should save more money and grow their capital to start trading with a more proper sum.
  • #179
  • Aug 17, 2020 1:00pm Aug 17, 2020 1:00pm
Quoting split_unit
{quote} Leverage should depend on your stop-loss level (risk), which depends on currency pair volatility and on the trade time horizon. Example 1 If you have a portfolio of $10,000, with a stop loss that's 0.5% percent away from current prices and you are willing to risk 0.5% of your portfolio then, the size of the trade should be: Portfolio = 10,000 Currency pair ABC/XYZ= 1.0000 Stop Loss is at= 0.9950 (0.5% below 1.0000), 50 pips away Amount willing to be risked is = 10,000 * .5% = 50 Amount to be allocated= amount to be risked / Stop Loss %=...

I think adjusting lot size would do the same function as changing leverage. You add unnecessary confusion, because, when I wanted to change leverage with Hotforex I had to go to personal area and make the adjustment. I think its same with other brokers. So lets talk about lot size instead of leverage.

One important function of low leverage is reduced incentive to increase risk. It is especially important setting for traders which are prone to gambling.
  • #180
  • Aug 18, 2020 12:40am Aug 18, 2020 12:40am
Like I said earlier, I still think 20x-30x is best to go for the newbie. Don't push for the higher level.
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