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Adjustable Leverage?

  • #1
  • First Post: Jan 30, 2008 2:11pm Jan 30, 2008 2:11pm
Hello!

I'm about to open a micro ($3k) account with EFX Group, but I have just found out, that the only leverage I can trade with is 100:1. And it is fixed.

I'm still new to all of this, but I'm wondering, if all (or most) brokers impose a fixed leverage, or do they let you adjust the leverage for each trade individually?

I wasn't planning to use a higher leverage than 10:1, but the support guy at EFX told me, that if I don't like the 100:1 leverage, I can trade a smaller position.

So, if I would trade with a smaller position, could I adjust it so that it would be the "same" as if I would trade with a 5:1 leverage, instead of 100:1?

Any help would be much appreciated.
  • #2
  • Jan 30, 2008 5:37pm Jan 30, 2008 5:37pm
Quoting Treehugger
Hello!

I'm about to open a micro ($3k) account with EFX Group, but I have just found out, that the only leverage I can trade with is 100:1. And it is fixed.

I'm still new to all of this, but I'm wondering, if all (or most) brokers impose a fixed leverage, or do they let you adjust the leverage for each trade individually?

I wasn't planning to use a higher leverage than 10:1, but the support guy at EFX told me, that if I don't like the 100:1 leverage, I can trade a smaller position.

So, if I would trade with a smaller position, could I adjust it so that it would be the "same" as if I would trade with a 5:1 leverage, instead of 100:1?

Any help would be much appreciated.

Yes. If, lets say, your maximum position size with 100:1 leverage is 10 lots, than all you need to do is to trade 20 times smaller position, which is 10/20= 0.5 lots and you will have exactly 5:1 leverage.
Hope this helps
  • #3
  • Jan 31, 2008 12:38am Jan 31, 2008 12:38am
Quoting DrainBamage
Yes. If, lets say, your maximum position size with 100:1 leverage is 10 lots, than all you need to do is to trade 20 times smaller position, which is 10/20= 0.5 lots and you will have exactly 5:1 leverage.
Hope this helps
Thank you! I was confused, because if I remember right, I think I've demoed a broker once, who was offering a "custom" leverage from a "drop down" menu from their trading platform. But since it is the same if I do the calculation manually, this is not a worry anymore. Thanks again.
  • #4
  • Jan 31, 2008 12:51am Jan 31, 2008 12:51am
adjusting position to give similar effect as adjusting leverage may works very well, but the margin may differ a bit, please read the term and count wisely,
you won't worry about it if you trade small lot though.
  • #5
  • Jan 31, 2008 6:29am Jan 31, 2008 6:29am
Quoting Gwan
adjusting position to give similar effect as adjusting leverage may works very well, but the margin may differ a bit, please read the term and count wisely,
you won't worry about it if you trade small lot though.

Thanks. What would you recommend? To find a broker, who offers adjustable leverage, or to calculate the position size manually?
  • #6
  • Jan 31, 2008 6:46am Jan 31, 2008 6:46am
If you have not taken the opportunity to read the post titled:
Information For Beginners, tagged as a Sticky on the top of the Beginner forum you should do so.
It answers these and other questions concerning leverage and basic MM.
In trading, there is no bullshit. You either make money or you don't.
  • #7
  • Jan 31, 2008 7:58am Jan 31, 2008 7:58am
Quoting mrgreen
If you have not taken the opportunity to read the post titled:
Information For Beginners, tagged as a Sticky on the top of the Beginner forum you should do so.
It answers these and other questions concerning leverage and basic MM.
Hi mrgreen and thanks for the suggestion.

I did read the whole thread, together with the money management rules (which was very helpful).

But, if we use DrainDamage's example, I need to do the calculations manually (which doesn't bother me at all) and the beginner guide says that:

FIRST Determine your stop in pips,
SECOND determine your position size based on percent risk and
THIRD see what your resultant leverage is. If the resultant leverage is too high, then lower your percent risk for the given stop size.

I guess what I would like to know is, if there are any brokers, who would let me choose the resultant leverage by "clicking" and selecting the leverage I would need. If the leverage I need is 5:1, then I would simply choose the 5:1 option.

But if this is not how it works and everyone needs to calculate its leverage and the number of lots manually, than OK, I don't mind it.

I apologize in advance, if my questions are too n00bish, but this is something I really don't understand (yet).
  • #8
  • Jan 31, 2008 8:26am Jan 31, 2008 8:26am
Quoting Treehugger
Hi mrgreen and thanks for the suggestion.

I guess what I would like to know is, if there are any brokers, who would let me choose the resultant leverage by "clicking" and selecting the leverage I would need. If the leverage I need is 5:1, then I would simply choose the 5:1 option.

But if this is not how it works and everyone needs to calculate its leverage and the number of lots manually, than OK, I don't mind it.

I apologize in advance, if my questions are too n00bish, but this is something I really don't understand (yet).
Well, may be you need to go to Oanda then. There, in settings, you can set order size as a percentage of maximum amount. So, if you have leverage 1:50, you can set order size as 10% and your effective leverage will automatically be 1:5.

But the easiest solution will be to make an Excel table which calculates you position size based on you risk profile and account size. So you enter there your account size, your stop loss in pips, and amount you want to risk (2% or watever you like) and it gives you your position size. Very easy.
  • #9
  • Jan 31, 2008 9:29am Jan 31, 2008 9:29am
Quoting DrainBamage
Well, may be you need to go to Oanda then. There, in settings, you can set order size as a percentage of maximum amount. So, if you have leverage 1:50, you can set order size as 10% and your effective leverage will automatically be 1:5.

But the easiest solution will be to make an Excel table which calculates you position size based on you risk profile and account size. So you enter there your account size, your stop loss in pips, and amount you want to risk (2% or watever you like) and it gives you your position size. Very easy.
I will do it via Excel then. Thanks to everyone for helping me with this!
  • #10
  • Jan 31, 2008 10:35am Jan 31, 2008 10:35am
Here is a spreadsheet I posted sometime back. There is a problem w/it in that if your acct is not USD then the calculations are wrong.
Maybe a knowledgable person can modify to accept any acct denomination.
http://forexfactory.com/showpost.php...1&postcount=17
In trading, there is no bullshit. You either make money or you don't.
  • #11
  • Jan 31, 2008 11:33am Jan 31, 2008 11:33am
Quoting mrgreen
Here is a spreadsheet I posted sometime back. There is a problem w/it in that if your acct is not USD then the calculations are wrong.
Maybe a knowledgable person can modify to accept any acct denomination.
http://forexfactory.com/showpost.php...1&postcount=17
Thanks, this looks useful! I won't have a MT4 platform, but I'll try replicate the spreadsheet anyway.
  • #12
  • Jan 31, 2008 12:05pm Jan 31, 2008 12:05pm
You can just download an mt4 demo for use - or if the platform u are using has dde it should work - though you may need to change the pair variable names to match what your borker provides.
In trading, there is no bullshit. You either make money or you don't.
  • #13
  • Last Post: Jan 31, 2008 12:52pm Jan 31, 2008 12:52pm
Quoting mrgreen
You can just download an mt4 demo for use - or if the platform u are using has dde it should work - though you may need to change the pair variable names to match what your borker provides.
Hm, a good idea. I'll try the demo first.
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