Who's offering more leverage here? | Forex Factory

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Who's offering more leverage here?

  • #1
  • First Post: Jan 31, 2010 10:31am Jan 31, 2010 10:31am
Broker A- offers 400:1 leverage and a margin call when your margin level reaches 0 %.
Broker B - offers 500:1 leverage and a margin call when your margin level drops to 100%.
My question is, who is offering the most leverage? A or B
thank you
  • #2
  • Jan 31, 2010 11:02am Jan 31, 2010 11:02am
The one which give you the most leverage is 1:500.

But you must know that Leverage is the no.1 killer of every forex trader.

There's a broker which let you pick the highest leverage, like 1:1000, but 1:1000 is the fastest way to kill your account.
At first, try the demo.
When you've find the system to win more than your lose, at least for 2-3 months, then you will ready to the next step.

Never use too much Leverage.
It's the double-sided sword.
It can kill you, but it can save you too.
Use it wisely.
  • #3
  • Jan 31, 2010 12:13pm Jan 31, 2010 12:13pm
Quoting juannie
The one which give you the most leverage is 1:500.

But you must know that Leverage is the no.1 killer of every forex trader.

There's a broker which let you pick the highest leverage, like 1:1000, but 1:1000 is the fastest way to kill your account.
At first, try the demo.
When you've find the system to win more than your lose, at least for 2-3 months, then you will ready to the next step.

Never use too much Leverage.
It's the double-sided sword.
It can kill you, but it can save you too.
Use it wisely.
Just to be clear, even with margin call at 100% instead of 0%, broker B is still offering more leverage? Have been trading live for 3 years so aware of risks of leverage. thanks
  • #4
  • Jan 31, 2010 3:12pm Jan 31, 2010 3:12pm
Quoting Toothman
Broker A- offers 400:1 leverage and a margin call when your margin level reaches 0 %.
Broker B - offers 500:1 leverage and a margin call when your margin level drops to 100%.
My question is, who is offering the most leverage? A or B
thank you
Assuming that by "margin level" you mean the remaining equity in your account (your starting equity minus the margin as well as the sum of all open losses) ...

... then Broker A actually gives you more cushion against a margin call.

For instance, assume that you have $1,000 and are purchasing 10,000 lots:

Broker A locks away $25, leaving you with $975 of equity. Broker B locks away $20, leaving you with $980 of equity. However, with Broker B, you'd receive a margin call once the remaining equity reached $20, which means you actually only have a cushion of $960.

Whereas Broker A gives allows for the entire remaining equity ($975) to be used as a cushion.
  • #5
  • Jan 31, 2010 8:01pm Jan 31, 2010 8:01pm
Quoting kibescorp
Assuming that by "margin level" you mean the remaining equity in your account (your starting equity minus the margin as well as the sum of all open losses) ...

... then Broker A actually gives you more cushion against a margin call.

For instance, assume that you have $1,000 and are purchasing 10,000 lots:

Broker A locks away $25, leaving you with $975 of equity. Broker B locks away $20, leaving you with $980 of equity. However, with Broker B, you'd receive a margin call once the...
Kib,
If you look at the MT4 platform, at the bottom it lists - balance, equity,margin, free margin and margin level all in bold print. Broker A offers 400:1 leverage and margin call at 0% margin level. Broker B offers 500:1 leverage and margin call at 100% margin level.
  • #6
  • Jan 31, 2010 9:01pm Jan 31, 2010 9:01pm
Quoting juannie
But you must know that Leverage is the no.1 killer of every forex trader.
I don't agree, sorry.
  • #7
  • Feb 1, 2010 6:27am Feb 1, 2010 6:27am
Quoting fxvoilaaa
I don't agree, sorry.
I don't agree also but don't want to get that old debate started on this thread. Just trying to determine which broker is offering more when it comes to leverage. 400:1 with margin call at 0% margin level or 500:1 with margin call at 100% margin level? thanks
  • #8
  • Feb 1, 2010 7:29am Feb 1, 2010 7:29am
Quoting juannie
But you must know that Leverage is the no.1 killer of every forex trader.
Have you had any experience regarding this or have you read it on some so called forex mentors websites? This statement is totally incorrect. The no. 1 killer of some forex traders is their inabilbity to trade a market that they don't understand. I use high leverage for my strategy and I am doing very well. It is those who don't know how to use leverage that give it a bad name unnecessarily.
  • #9
  • Feb 1, 2010 7:46am Feb 1, 2010 7:46am
Quoting PipStar
Have you had any experience regarding this or have you read it on some so called forex mentors websites? This statement is totally incorrect. The no. 1 killer of some forex traders is their inabilbity to trade a market that they don't understand. I use high leverage for my strategy and I am doing very well. It is those who don't know how to use leverage that give it a bad name unnecessarily.
Well said. Completely agree. If you can't trade don't blame the leverage.
  • #10
  • Feb 1, 2010 7:58am Feb 1, 2010 7:58am
Quoting juannie
Never use too much Leverage.
It's the double-sided sword.
It can kill you, but it can save you too.
Use it wisely.
Great saying, big leverage is a recipe for disaster, it might look good on the “positive” theory but if the trend reverses that 500:1 leverage will wipe you out in just a trade… are you that risky trading? I think 100:1 is the right amount… good profit and gives a good margin in bad trades
  • #11
  • Feb 1, 2010 10:59am Feb 1, 2010 10:59am
Quoting belekas
Well said. Completely agree. If you can't trade don't blame the leverage.
Indeed. I have 1:500 leverage and margin call at 20%. I've never had the opportunity to utilise both "features" fully yet

If you follow a proper money/risk management regime, there is no reason for you fear high leverage at all. It means nothing to me whether I have 1:100 or 1:500. I chose it because it was there
  • #12
  • Last Post: Feb 1, 2010 11:49am Feb 1, 2010 11:49am
Can we get back to the original question instead of debating leverage? Is kebiscorp correct in his calculations on the forth post? thanks
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