Is it good use high or low leverage as a beginner? | Forex Factory

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Is it good use high or low leverage as a beginner?

  • #1
  • First Post: Nov 6, 2007 3:00pm Nov 6, 2007 3:00pm
I would like to use 1:100 leverage but don't know which broker have such kind. fxdd is 200 and oanda max is 50:
  • #2
  • Nov 6, 2007 3:05pm Nov 6, 2007 3:05pm
I use a leverage between 1:1 up to 3:1 per trade. I know, most new traders might find this boring but I can tell you it's possible to make 0.5-1% per day even with this low leverage...

BTW: My leverage at Oanda is set to 50:1, but this has nothing to do with the real leverage I use. It's more a margin thing.

I'd recommend to trade small. Always.

Regards - Xaron
  • #3
  • Nov 6, 2007 3:06pm Nov 6, 2007 3:06pm
Quoting forex killer
I would like to use 1:100 leverage but don't know which broker have such kind. fxdd is 200 and oanda max is 50:
You should know it how many leverage u use before trading with real money.
Trainee at UBS Investment Banking
  • #4
  • Nov 6, 2007 8:42pm Nov 6, 2007 8:42pm
Quoting Xaron
I use a leverage between 1:1 up to 3:1 per trade. I know, most new traders might find this boring but I can tell you it's possible to make 0.5-1% per day even with this low leverage...

BTW: My leverage at Oanda is set to 50:1, but this has nothing to do with the real leverage I use. It's more a margin thing.

I'd recommend to trade small. Always.

Regards - Xaron
Amen! I agree 100% - and if you ever decide to trade for an institution, they will never allow you to trade using the 100-to-1-swing-for-the-fences style that many traders (who are ticking time bombs!) employ.
  • #5
  • Nov 7, 2007 9:18pm Nov 7, 2007 9:18pm
Quoting Xaron
I use a leverage between 1:1 up to 3:1 per trade. I know, most new traders might find this boring but I can tell you it's possible to make 0.5-1% per day even with this low leverage...

BTW: My leverage at Oanda is set to 50:1, but this has nothing to do with the real leverage I use. It's more a margin thing.

I'd recommend to trade small. Always.

Regards - Xaron

yes but with 1:1 you would need a rather big account to profit off 0.0001 price movements. why bother, with that money your better off trading futures or stocks. do not take offesne if i sound rude sry but i am expressing my own point i might be wrong here please correct me if that is so.
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  • #6
  • Nov 8, 2007 2:26am Nov 8, 2007 2:26am
Why?

Example: $10,000 account
Leverage: 1:1
Pair: EUR/USD

You go long at 1.4500 and take profit at 1.4600 with 0.1 standard lots (= 10,000 units). That's a leverage of 1:1 and you made $100 profit or 1%!

I do this all the time and make about 1% per day at the moment...

Regards - Xaron
  • #7
  • Nov 8, 2007 11:23am Nov 8, 2007 11:23am
Good thread, What method you are using sir ? Iam new and found it difficult to make 100 pipes daily.
Let's trade together.
  • #8
  • Nov 8, 2007 11:31am Nov 8, 2007 11:31am
Actually, you need ~14600 USD to open a 10k Units Eur/Usd trade, so leverage would be ~1:1.46
  • #9
  • Nov 8, 2007 11:32am Nov 8, 2007 11:32am
Quoting jjk2
yes but with 1:1 you would need a rather big account to profit off 0.0001 price movements. why bother, with that money your better off trading futures or stocks. do not take offesne if i sound rude sry but i am expressing my own point i might be wrong here please correct me if that is so.
Just ask your self who won the race tortoise or hare. If your not willing to put in the time your rite what is the point those people probably shouldn't even be here. If someone here thinks their going to start living off a micro mini or mini account in a few years GOOD LUCK!

probably better off w/ a lotto ticket

But if your willing to put in the time 5 maybe 10 years this account will slowly grow and over time you should be able to add to it and then the only person you will have to answer is your broker...
  • #10
  • Nov 8, 2007 12:16pm Nov 8, 2007 12:16pm
maybe read this from post 18
http://www.forexfactory.com/showthre...?t=6948&page=2

it will clear your head about what is leverage, and how important money management really is
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #11
  • Nov 8, 2007 12:35pm Nov 8, 2007 12:35pm
Read up on MM before you even ask leverage questions.. As a newbie, you should be trading nothing but demo..
google:
  • #12
  • Nov 8, 2007 2:21pm Nov 8, 2007 2:21pm
Quoting Xaron
Why?

Example: $10,000 account
Leverage: 1:1
Pair: EUR/USD

You go long at 1.4500 and take profit at 1.4600 with 0.1 standard lots (= 10,000 units). That's a leverage of 1:1 and you made $100 profit or 1%!

I do this all the time and make about 1% per day at the moment...

Regards - Xaron
I totaly agree with that.

I have actually a close to 10k account and i trade 0.1 to max 0.3 and that is more than enough allready.
  • #13
  • Nov 9, 2007 3:13am Nov 9, 2007 3:13am
@shrike: Ok, you're right of course.

@FXBaby: I do one directional grid trading in the direction of the fundamental trend, e.g. in the EUR/JPY

http://www.leidel.net/dl/fx/charts-b...jpy_091107.png

I use no stops but take profits and very small position sizes. I have a comfort zone (see the orange lines) from 160.00 to 168.00 divided into 4 sections. I reload my grid if it goes up again.

I do this in several pairs.

Regards - Xaron
  • #14
  • Nov 12, 2007 6:55am Nov 12, 2007 6:55am
low leverage is a very good idea most of the time. Inexperience and high leverage is almost always a recipe for blowing your account.
  • #15
  • Nov 12, 2007 7:19am Nov 12, 2007 7:19am
To my opinion it is not the leverage that is important. It is the risk you take in a trade and the money management abilities.

What I mean?


For example lets look at 2 extremes. Leverage 1:20 and 1:500. Account size 1,000 EUR. Lot size 10,000 (For example 0.1 lot in EUR/USD).

o) Leverage - 1:20. Margin requirement for the trade 10,000EUR(trade size) / 20(leverage) = 500EUR. Remaining after margin requirement is 500 EUR.
o) Leverage - 1:500. Margin requirement for the trade 10,000EUR(trade size) / 500(leverage) = 20EUR. Remaining after margin requirement is 980 EUR.

So you can see the lot sizes is the same (i.e. the corresponding risk associated with this trade is the same). But in the larger leverage levels you have more money not blocked for the margin requirement for the trade.


For this reason I use high leverage. And to all novices I would recommend: Use the smallest lot size, i.e. do not take to much risk in a single trade. And read about Money Management.
  • #16
  • Nov 12, 2007 11:18am Nov 12, 2007 11:18am
Will you post grid indicator and also tell me how to use this ? Is there any tread available on this forum who specify how to use this method ? Please give me link.
Let's trade together.
  • #17
  • Nov 12, 2007 3:07pm Nov 12, 2007 3:07pm
Quoting Xaron
Why?

Example: $10,000 account
Leverage: 1:1
Pair: EUR/USD

You go long at 1.4500 and take profit at 1.4600 with 0.1 standard lots (= 10,000 units). That's a leverage of 1:1 and you made $100 profit or 1%!

I do this all the time and make about 1% per day at the moment...

Regards - Xaron


Do you really think you can make 100 pips a day? That is 100 x 20 = 2000 pips x 12 = 24,000 pips a year WOW.

If you are succesfull to get 2000 pips a month, why not use 1:10 leverage?
That will be a ROE of 10,000% a year instead of 100% a year.
Trainee at UBS Investment Banking
  • #18
  • Nov 13, 2007 4:08am Nov 13, 2007 4:08am
Quoting th_ngue21
Do you really think you can make 100 pips a day?
Of course not. Not in one pair.

Why not a leverage of 10:1? Because it would blow my account away.

Regards - Xaron
  • #19
  • Jan 23, 2010 7:18am Jan 23, 2010 7:18am
Quoting forex killer
I would like to use 1:100 leverage but don't know which broker have such kind. fxdd is 200 and oanda max is 50:
Let's just say that a broker letting you use 100:1 leverage probably doesn't have your best interests at heart

I think 2:1 is fine, 3:1 is fine 5:1 is a bit dodgy and 10:1 is WAY TO MUCH.

Tiny stop losses degrade the performance of any trading system in my experience. If your stop loss is 1% of the market's value (in my opinion that is a small stop loss) and you use 50:1 leverage are you OK with losing half your account if you're wrong? How about if you're wrong twice is a row?
  • #20
  • Jan 23, 2010 8:03am Jan 23, 2010 8:03am
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
Quoting Davidee
Let's just say that a broker letting you use 100:1 leverage probably doesn't have your best interests at heart

I think 2:1 is fine, 3:1 is fine 5:1 is a bit dodgy and 10:1 is WAY TO MUCH.

Tiny stop losses degrade the performance of any trading system in my experience. If your stop loss is 1% of the market's value (in my opinion that is a small stop loss) and you use 50:1 leverage are you OK with losing half your account if you're wrong? How about if you're wrong twice is a row?


that's nonsense... low leverage doesn't prevent a beginner from dump trading decisions 50 times in a row
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