How much leverage you use ? | Forex Factory

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How much leverage you use ?

  • Poll

  • How much leverage u use usually ?
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  • #1
  • First Post: Jan 18, 2010 7:07am Jan 18, 2010 7:07am
Regardless if u r profitable or not , how much leverage u use usually in your forex trading ?
  • #2
  • Jan 18, 2010 7:10am Jan 18, 2010 7:10am
as much as they will give me, currently 100:1. If used responsibly it is a great tool.
  • #3
  • Jan 18, 2010 7:13am Jan 18, 2010 7:13am
i ignored 400:1 because it is not allowed now in the US , even there is traders with UK brokers who use more than that , they can choose the 100:1 option ...
  • #4
  • Jan 18, 2010 8:53am Jan 18, 2010 8:53am
If you are ignoring leverage above 100 then your poll is flawed.
  • #5
  • Jan 18, 2010 9:04am Jan 18, 2010 9:04am
Quoting Leche Mocha
If you are ignoring leverage above 100 then your poll is flawed.
If you want to vote for anything above 100:1 choose 100:1.

It's not flawd, read previous posts.
ok Friendo? This is madness!?!? - THIS, IS, FOREX!!!
  • #6
  • Jan 18, 2010 9:27am Jan 18, 2010 9:27am
Can moderators edit the poll to make the first option 100:1 or more instead of 100:1 ?
  • #7
  • Jan 18, 2010 9:37am Jan 18, 2010 9:37am
No, it's flawed. If people are voting for more than 100 then what exactly are they are voting for. 120? 150? 200? 300? what? You don't know because it's capped at 100.

Hence, it is flawed.

Quoting Liger86
If you want to vote for anything above 100:1 choose 100:1.

It's not flawd, read previous posts.
  • #8
  • Jan 18, 2010 9:49am Jan 18, 2010 9:49am
Quoting Leche Mocha
No, it's flawed. If people are voting for more than 100 then what exactly are they are voting for. 120? 150? 200? 300? what? You don't know because it's capped at 100.

Hence, it is flawed.
The first option is 100:1 or more ( excessively leveraged ) , i cant put many options in it like 2:1 , 3:1 , 5:1 25:1 , 40:1 , the first one is 100:1 or more (high leverage ) , the last one is 10:1 or less ( low leverage )
  • #9
  • Jan 18, 2010 9:49am Jan 18, 2010 9:49am
Quoting tar
Can moderators edit the poll to make the first option 100:1 or more instead of 100:1 ?
There is no need to expand the poll unless you want to nail the biggest loser... Btw, count me in for the bottom group.
Trading is the game of fear and greed.
  • #10
  • Jan 18, 2010 9:51am Jan 18, 2010 9:51am
100:1 or higher if they allow it.
  • #11
  • Jan 18, 2010 11:50am Jan 18, 2010 11:50am
Is it per trade or across all trades open at any one time?
  • #12
  • Jan 18, 2010 11:51am Jan 18, 2010 11:51am
Quoting yesbee1
Is it per trade or across all trades open at any one time?
Good question , it is in one trade ...
  • #13
  • Jan 18, 2010 1:15pm Jan 18, 2010 1:15pm
People should distinguish between REAL Leverage and what the Broker offers you. You could trade with a broker offering 500:1 leverage and still use only 20:1 real leverage.
  • #14
  • Jan 18, 2010 1:38pm Jan 18, 2010 1:38pm
Quoting TJPLD
People should distinguish between REAL Leverage and what the Broker offers you. You could trade with a broker offering 500:1 leverage and still use only 20:1 real leverage.
Exactly. If ur Mercedes is capable of doing 250mph, it doesn't mean u have to drive it at that speed. 55 mph is much safer. But it's nice to know "it's there", just in case
  • #15
  • Jan 18, 2010 2:07pm Jan 18, 2010 2:07pm
Broker's leverage: 50:1
True leverage: 1.67:1 per trade, max 6 trades = 10:1
  • #16
  • Jan 19, 2010 5:18am Jan 19, 2010 5:18am
Consistently profitable traders, who do not expose themselves to significant risk, don't care very much about how much "leverage" they use.

What matters is the %risk of capital, per trade, and what the probability of success/failure is for that trade.

"leverage" is a trap - forget about it. Look instead at the risk to your capital in each trade and you will quickly forget about leverage unless you are doing something stupid like using HUGE stop loss levels where your accout goes into significant drawdown for a period of time (in which case sooner or later your account will be gone - guaranteed)

The maximum risk to my capital per trade is usually 2% (often less) - as to what leverage that creates on my account is of no relevance whatsoever.

In order to be relevant, the poll should have an "irrelevant" option.
  • #17
  • Jan 19, 2010 5:25am Jan 19, 2010 5:25am
Quoting Hedginghog
Consistently profitable traders, who do not expose themselves to significant risk, don't care very much about how much "leverage" they use.

What matters is the %risk of capital, per trade, and what the probability of success/failure is for that trade.

"leverage" is a trap - forget about it. Look instead at the risk to your capital in each trade and you will quickly forget about leverage.
I agree with you , i made a poll to know how much leverage traders use despite if they r profitable or not ...
  • #18
  • Jan 19, 2010 6:25am Jan 19, 2010 6:25am
My broker uses 1:100 leverage. At the moment I risk 2% per trade, which comes down to < 1:10 effectively. Like people already mentioned, we shouldn't care about leverage, because it has to be offset by sizing.

Nevertheless, I don't like the fact that there are proposals of limiting leverage to 1:10 in the US, as it limits the trader's possibilities of shaping his personal risk structure.
The nail that sticks out gets hammered back in
  • #19
  • Jan 19, 2010 6:41am Jan 19, 2010 6:41am
Quoting tar
Regardless if u r profitable or not , how much leverage u use usually in your forex trading ?
Tar,
where is 200:1 option???
Im Using that...
  • #20
  • Jan 19, 2010 7:35am Jan 19, 2010 7:35am
I agree with Hedginghog. Leverage is, or at least should be, largely irrelevant. Risk is everything.

Anyway, the following formula applies for any position size on any xxxUSD pair:

Leverage required = %risk x 10,000 / SL pips

As an example, if you risk the rule-of-thumb 2% of your account per trade, and employ a stoploss that's 50 pips away from entry, the minimum leverage required is 0.02 x 10,000 / 50 = 4:1.

For a scalper using a 10 pip SL, the minimum leverage required is 0.02 x 10,000 / 10 = 20:1.

The risk is 2% in each case, which is what ultimately matters. Of course additional leverage is needed if one wishes to have multiple trades open simultaneously (but then one should consider the effect of correlation on exposure). The meaningfulness of the OP's question is reduced, when one considers that the different leverage requirements are perfectly valid for the different approaches to trading.

For anybody who's interested in more detailed calculations, see my post here.
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