Thoughts on 50:1 Leverage | Page 7 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Anyone using high leverage successfully? 72 replies

High leverage vs Low leverage 74 replies

High Leverage vs Low Leverage 21 replies

High Leverage vs Low Leverage 20 replies

Inquiry of 400:1 leverage method 11 replies

Thoughts on 50:1 Leverage

  • #121
  • Sep 6, 2010 10:42am Sep 6, 2010 10:42am
Quoting Banker
Hi Monroe

I thought you was really very successful at scalping forex. Is there any reason to retire from it?
I came from stocks and Forex is way better overall IMO.

I still trade a few stocks but I cant see going back.

Stocks take a lot of work, reading 10Q, 10K, etc and most of time you have to ask yourself if the CEO, CFO, or the like are telling the truth.

unless you are 100% TA trader when it comes to stocks
  • #122
  • Sep 6, 2010 10:54am Sep 6, 2010 10:54am
Quoting pipmutt
I see. Can you give an example of how you 'plug it into your overall equation and do the math'?

just like any other variable/constant.

ie., End of the week(or however often you withdraw from your account), based on 400:1 leverage I only need to keep X amount of $$ in my account.

Now that that variable/constant has changed. End of the week, now I have to keep X+Y, where Y is the additional amount of capital you must have in your account now.

My point is with previous higher leverages, traders that use and are successful at using the least amount of capital to make the most on returns do so because of the higher leverage.

With the new regs, that equation will have to change.


Im sure most here would agree that if a pair is make higher highs and higher lows that it is in a uptrend right?

Do you not see that the leverage changes are making lower lows meaning its changed for the worst in the past year from 400:1, to 100:1 and now 50:1, only a matter of time before its 1:1.

Why? Because its going lower everytime the CFTC changes it.

Im sure those that make a fair return trading forex would hate to lose Forex as a trading instrument because they dont have $100k accounts.

I look at this situation long term, long term those of us who enjoy trading Forex could the ability altogether.
  • #123
  • Sep 6, 2010 11:00am Sep 6, 2010 11:00am
I dont know what all the fuss is about, it is only newbies and suckers that get conned into using high leverage with promises of making fortunes in forex and then blowing their accounts. Any seasoned and knowledgable trader wont use more than 10 to 1 leverage anyway.
  • #124
  • Sep 6, 2010 11:34am Sep 6, 2010 11:34am
Quoting johnvr
I dont know what all the fuss is about, it is only newbies and suckers that get conned into using high leverage with promises of making fortunes in forex and then blowing their accounts. Any seasoned and knowledgable trader wont use more than 10 to 1 leverage anyway.
Your blanket statement is total bull. Lots of seasoned traders use leverage very successfully. I'm really sick of people coming on here bragging how they don't need the higher leverage. Different strategies call for different amounts of leverage needed. Stop giving the CFTC encouragement or it won't be long until they drop the leverage to the next level.
  • #125
  • Sep 6, 2010 2:22pm Sep 6, 2010 2:22pm
Quoting Toothman

Lots of seasoned traders use leverage very successfully.
I agree, most successful traders use leverage successfully, just not crazy leverage like 100 or 400:1!!

We've already heard from one major bröker that only a small percentage of accounts trade above 50:1 so it seems 50:1 is perfectly adequate for the majority, it's more than enough.

Quoting Toothman
I'm really sick of people coming on here bragging how they don't need the higher leverage.
I wouldn't say anyone is 'bragging', it's just plain common sense really.

Perhaps if you took 2 seconds to work out the leverage you use on an average trade you may find it's substantially less than you think!
  • #126
  • Sep 6, 2010 2:38pm Sep 6, 2010 2:38pm
Quoting akirax

My point is with previous higher leverages, traders that use and are successful at using the least amount of capital to make the most on returns do so because of the higher leverage.
And where does risk feature in all this 'least amount of capital to make the most on returns.....because of the higher leverage', can you give us a practical example?

I get the feeling you're talking about your brokers margin requirement rather than how much you leverage.......
  • #127
  • Sep 6, 2010 3:03pm Sep 6, 2010 3:03pm
Quoting Monroe
Dealers need to trade against there clients, they offer you liquidity. Someone has to take the other side of your trade don't they? With an ECN in some cases it's not your broker directly, but someone is. If you're getting bad execution that is one thing, definitely change your broker... you should be getting fair execution.

Someone who is complaining about making so much money with 400:1, I would think so much money would be able to land you an account with at least tier 2 PB? There, you won't be getting over 100:1... more likely 50:1... and...
Totally agree with your last sentence, they are throwing mud at the moon.
  • #128
  • Sep 6, 2010 3:10pm Sep 6, 2010 3:10pm
Max i sent my state rep a copy of wat i wrote in post 1 of these thread , i hope it knoks some sense into them ......
  • #129
  • Sep 6, 2010 3:16pm Sep 6, 2010 3:16pm
Some people's comment(s) make me wonder if they are actually retail forex traders. Obviously some trade the forums. Easier to earn pips this way. Brokers boys.

Even a beginer soon learns there are several ways to trade forex.
Some are best at 1:1 leverage. Others are at their peak with maximal leverage posssible. Some combine various levels depending on market conditions.

To insist that any one who does not use a particular risk model (within the limits of their own intelligence) cannot trade forex successfully clearly proves my point.

For eg my strategy will work better and better the higher the leverage available to me. Unless you also claim to be omniscience, you don't even know what my strategy is, so cannot claim limiting my leverage is the best for it. I don't use all the indicators available in my terminal but please don't protect me by removing them. Real forex traders want more options on the table whether they use it sometimes, occassionally, never or all the time. Not less, unless your are a forum trader. lol.

But then it's probably easier to trade the forums. Still no need to insult other people's intelligence and resourcefullness.

Fellow retail traders- a word of hope: we will find a way. They need us (our money, atleast) like we need them otherwise it will be free for all which they are even more afraid of.

King.
  • #130
  • Edited 3:56pm Sep 6, 2010 3:36pm | Edited 3:56pm
Quoting pipmutt
I agree, most successful traders use leverage successfully, just not crazy leverage like 100 or 400:1!!

We've already heard from one major bröker that only a small percentage of accounts trade above 50:1 so it seems 50:1 is perfectly adequate for the majority, it's more than enough.


I wouldn't say anyone is 'bragging', it's just plain common sense really.

Perhaps if you took 2 seconds to work out the leverage you use on an average trade you may find it's substantially less than you think!
If you take the time to read the NanningBob threads you'll see how we trade multiple pairs at the same time very successfully. Bob has banked nearly 20,000 pips in less than a year using his EA's. We trade multiple pairs and multiple levels. We pull the plug at some point when trades go against us so the multi- level approach is controlled. Of course we don't run our margin down to critical levels but we like the extra room 400:1 leverage gives us to help manuver out of a bad trade.
The higher leverage helps a newer trader to learn the ropes with less capital at risk. Do you want to lose $10,000 learning how to trade or do you want to lose $500 . Bob makes some very good arguments for the benifits of higher leverage in his threads. Learn to trade like him using leverage like he does and you won't be encouraging the once a year cut in leverage the CFTC is dishing out.
  • #131
  • Sep 6, 2010 4:02pm Sep 6, 2010 4:02pm
Quoting Toothman

we trade multiple pairs at the same time very successfully.
And....? Sorry, I miss the point of that statement. There are plenty of traders who trade multiple pairs successfully, it's not rocket science.

Quoting Toothman

We trade multiple pairs and multiple levels.
Scale in/out, average? Ok, nothing new there really.

Quoting Toothman

We pull the plug at some point when trades go against us so the multi- level approach is controlled.
Well I sure hope you do, it's called controlling risk and limiting loss! Hopefully you use your analysis to indicate when a trade is wrong rather than some arbitrary percentage or dollar amount.

Quoting Toothman

The higher leverage helps a newer trader to learn the ropes with less capital at risk. Do you want to lose $10,000 learning how to trade or do you want to lose $500 .
Novice traders need to learn about risk management rather than overleveraged trading with a few hundred bucks, ultimately it's what will lead to longevity in this business. Just because a novice has a $10k account doesn't mean he can't risk only 5% of it ($500). Your argument isn't even an argument, it doesn't actually make any logical/mathematical sense!

Quoting Toothman

Bob makes some very good arguments for the benifits of higher leverage in his threads.
Such as?
  • #132
  • Sep 6, 2010 4:15pm Sep 6, 2010 4:15pm
Nanningbob makes an excellent eg of wise us of high leverage.

Personally, i have not gone above 20% of my account balance in drawdown in the last 3 months thanks to 1:100 leverage.

With 1:10 leverage for example I would have blown the entire account twice atleast.

Whether delibrate or not these rules continue to favour brokers. But alas
they have made their move. We are considering ours. When we finally do, profit shall also be 2 to 5 times higher in absolute terms.

Like I said, they need us (they want our money!). Carrot.

King.
  • #133
  • Sep 6, 2010 4:35pm Sep 6, 2010 4:35pm
Quoting pipmutt
And....? Sorry, I miss the point of that statement. There are plenty of traders who trade multiple pairs successfully, it's not rocket science.


Scale in/out, average? Ok, nothing new there really.


Well I sure hope you do, it's called controlling risk and limiting loss! Hopefully you use your analysis to indicate when a trade is wrong rather than some arbitrary percentage or dollar amount.


Novice traders need to learn about risk management rather than overleveraged trading with a few hundred bucks, ultimately it's what will lead...
You'll have to read his thread to understand where I'm coming from. We don't overleverage. We trade small lots and like the extra leverage to trade our way out of trades going against us.
One size doesn't fit all here. Like I said, one strategy may require more leverage than another. Just because you deem that 50:1( next year probably 20:1 the way things are going) is plenty doesn't mean it's plenty for other strategies. You just don't get it do you? We don't all trade the same strategy you do but we may do very well with our strategy which requires more leverage.
  • #134
  • Sep 6, 2010 4:39pm Sep 6, 2010 4:39pm
lol... if you need over 100:1 even over 50:1 IMHO your strategy sucks. but hey that's just my opinion. good luck nanningbobbing the market.
  • #135
  • Sep 6, 2010 5:01pm Sep 6, 2010 5:01pm
Quoting Monroe
lol... if you need over 100:1 even over 50:1 IMHO your strategy sucks. but hey that's just my opinion. good luck nanningbobbing the market.
There you go again Ronald R. would have said. There you go with your blanket statements. If you want to argue with 20,000 pips in 10 months go right ahead. Read his thread and be enlightened. Tired of arguing with you guys. Back to making money.
  • #136
  • Sep 6, 2010 5:35pm Sep 6, 2010 5:35pm
Wow ... just wow.

It's really fucking amazing that after nearly an entire year of ranting, debating, and bitching ... most people STILL don't get exactly WHY this is a problem.

For the last goddamn time, it's about the MARGIN, not how many lots you can buy!!!

Lowering the leverage from 100:1 to 50:1 means TWICE as much margin is now going to be required (locked up) when you make a trade (or even SET an order, for that matter).

For those of you who still don't fucking understand what exactly that means, let me once again make it very clear:

It means you now have HALF AS MUCH wiggle room as you did before.

You might argue that you set very tight stops so that you wouldn't even need that much "wiggle room" to begin with.

Simplified thinking at its most moronic.

Some people like to set STOP orders, entering a position automatically only if the price hits that target. And they might set both buy and sell STOP orders on multiple pairs, meaning you may have MULTIPLE orders open at one time, but only a few will end up getting triggered, and probably not at the same time.

Well, guess what? Every single one of those ORDERS (not positions, JUST orders) will now require TWICE as much margin as before, not when and if they are triggered, but WHEN THEY ARE SET.

People may not be using 100:1 leverage on any one single position, but you people fail to remember (or perhaps realize to begin with) that EVERY single open order you have at one time, regardless of whether or not they will even be triggered, counts towards that total leverage.

Those of you who only make market orders one at a time probably wouldn't be affected (or at least shouldn't) by this decrease, but for those that set stop orders on multiple pairs in either direction, this reduction makes the boundaries a lot tighter. Leverage isn't just about what position(s) you have open, the sum of all your open orders are also included when the margin is calculated.
  • #137
  • Sep 6, 2010 5:36pm Sep 6, 2010 5:36pm
Yea who cares, make money man, good luck and happy trading.
  • #138
  • Sep 6, 2010 5:40pm Sep 6, 2010 5:40pm
Quoting Toothman
Tired of arguing with you guys. Back to making money.
  • #139
  • Sep 6, 2010 5:40pm Sep 6, 2010 5:40pm
Quoting kingsurfer

With 1:10 leverage for example I would have blown the entire account twice atleast.
Sounds like you're averaging. Sure, that works....until it doesn't.


Quoting Toothman

We trade small lots and like the extra leverage to trade our way out of trades going against us.
Same comment to you as I made to kingsurfer above.

Quoting Toothman

One size doesn't fit all here. Like I said, one strategy may require more leverage than another. Just because you deem that 50:1( next year probably 20:1 the way things are going) is plenty doesn't mean it's plenty for other strategies. You just don't get it do you? We don't all trade the same strategy you do but we may do very well with our strategy which requires more leverage.
All you've got to do is the math, maybe you'll figure it out, or not.

Quoting Toothman

Tired of arguing with you guys.
Of course you are, it's hard to defend with logical argument something which you don't actually understand!
  • #140
  • Sep 6, 2010 5:48pm Sep 6, 2010 5:48pm
Quoting pipmutt
it's hard to defend with logical argument something which you don't actually understand!
But that doesn't stop you from trying
1 trader viewing now