Joined Mar 2013
Status: Junior Member
Hmmm.. I understand that position size determines your true leverage and not the maximum leverage of your broker...
But if you have two accounts and on both of them 1 lot was opened, which account will be margin called more quickly? The account with a maximum leverage of 1:1 or the one with a maximum leverage of 10:1?
I did not understand you like that
Maybe because I have not learned English well yet
But the best solution to this problem is risk management
For example, risk 1% of your total capital for each trade
The risk management system tells you what leverage to use
The approach of using leverage is different from trader to trader. Traders mostly prefer high leverage in trading and I know high leverage brings out high profit but it is risky too. So, I want traders to take small lot in trading so that they can be benefited. But traders should be cautious about selecting leverage.
I find it useful because leverage increases the trading margin. When you trade with the capital higher than you deposit it makes profit accordingly, even a small fluctuation in price could increase profit.
A high leverage ratio lowers the margin. Therefore, it would be a useful action for those who know their job. However, for investors who do not know how to trade yet, it would be good to do research beforehand.