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Thoughts on 50:1 Leverage

  • #161
  • Sep 6, 2010 8:33pm Sep 6, 2010 8:33pm
Quoting pipmutt
lol, all that would be great except you're missing one important statistic.....allegedly 95% lose!

Hey, if you can't defend or justify your argument with reason and logic it's nothing to be embarrassed about, it seems not everyone has the ability to work a calculator!

Too funny....
yet from 2009, Retail fx trading continues to surge http://www.forexblog.org/2009/06/ret...-to-surge.html

95% lose what? a trade? actually 100% percent lose trades

You mean their account? What's the percentage of the 95% that lose, come back and make forex trading profitable even if marginally?

Hell, Warren Buffet lost $1.2B from currency investments in 05.

Ever stop to think a noob entering Forex sees that 95% figure being tossed around and asks him or herself why, finds the top 10 mistakes new traders make and minimize repeating the same mistake.

Go over to the threads, and read how a lot of the most respected posters LOST, refined their approach and are now profitable.

Nothing wrong with losing, all that matters is what you learn from it,
either correct the bad habits or keep doing the same thing expecting a different outcome.

I lost 95% of my retirement account that was well diversified and managed by financial experts... now what?

Perhaps Buffet lost 1.2Billion using high 500:1 leverage. OR OR maybe he shorted bottoms and bought tops....lol

ok guys, this was fun...EU just dropped 100 pips from 2890 and I caught 95% of it. back to business now.
  • #162
  • Sep 6, 2010 8:36pm Sep 6, 2010 8:36pm
Quoting pipmutt
lol, if only you understood how meaningless those figures are!

Nope, never read his thread, I rarely visit the strategies section, waste of time in my opinion. Can't comment on his strategy because I don't know what it is, although from what people have said in this thread it seems to be averaging with extremely small positions. On the face of it not an effective use of capital in my opinion.

As for the vouch, well it could have been for any number of reasons, I can't remember now, is that a problem for you then?
Bingo,
You have no idea how he trades yet you're perfectly comfortable telling us it won't work . So your way of trading is the only way and since you only need 10:1 leverage( or less) anyone else who prefers higher leverage to fit their trading strategy has to be a loser. I'm beginning to think I might be arguing with some 13 yr. old kid who just enjoys agitating people.
  • #163
  • Sep 6, 2010 9:00pm Sep 6, 2010 9:00pm
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Quoting akirax
yet from 2009, Retail fx trading continues to surge http://www.forexblog.org/2009/06/ret...-to-surge.html
What's your point? Brokers can market well?

Quoting akirax
95% lose what? a trade? actually 100% percent lose trades
Their entire account minus some margin, is how the legend goes
Quote
=akirax]
What's the percentage of the 95% that lose, come back and make forex trading profitable even if marginally?
I have no idea, do you? Who cares who makes marginal profits anyway?

Quoting akirax

Hell, Warren Buffet lost $1.2B from currency investments in 05.
is this relevant? Or are you comparing retail forex traders to Warren Buffet?

Quoting akirax
Ever stop to think a noob entering Forex sees that 95% figure being tossed around and asks him or herself why, finds the top 10 mistakes new traders make and minimize repeating the same mistake.
Ever stop to think that this is the baseline for everybody here and that, that information does not preclude you from the alleged percentage.

-The trend is your friend
-never risk more than 2%
-cut your losers short

is all great advice but you still have no edge
  • #164
  • Sep 7, 2010 12:03am Sep 7, 2010 12:03am
Quoting Czech
What's your point? Brokers can market well?


Their entire account minus some margin, is how the legend goes
I have no idea, do you? Who cares who makes marginal profits anyway?


is this relevant? Or are you comparing retail forex traders to Warren Buffet?


Ever stop to think that this is the baseline for everybody here and that, that information does not preclude you from the alleged percentage.

-The trend is your friend
-never risk more than 2%
-cut your losers short

is all great advice but you still have no edge
Czeck and all you guys that keep saying that you feel safer that the leverage has been limited (even though this doesnt make sense since a freedom is being stolen as outlined in the first post and you have the choice on how much volume of a currency to purchase ==rolling eyes anways..==) you guys do realize that 90 percent of stock daytraders blow up their accounts as well. Stock daytraders that are not leveraged nearly as high as forex traders. What can we extrapolate from these statistics. Most likely the cause of loss is that there are few traders with the stomach, and strategy to profit from short term whippy random movements. It is the short term trading style, scalpers that are risky and not the leverage. This may upset some of you traders that love your scalping but low leverage. I myself do not enter a trade unless I am going for at least 200 pips usually 300 pips with at least 1:4 ratio risk to reward ratio and I have been quite profitable. Should I impose this trading style on everyone else and make a CFTC law because I believe Scalping is risky and that anyone who tries to interpret and trade short term movements of less than 150 pips is risky and unsafe and that I need to protect them for their own good because they're stupid to scalp?


Answer: absolutely not. It's about the freedom
  • #165
  • Sep 7, 2010 2:31am Sep 7, 2010 2:31am
Quoting akirax
yet from 2009, Retail fx trading continues to surge http://www.forexblog.org/2009/06/ret...-to-surge.html

95% lose what? a trade? actually 100% percent lose trades

You mean their account? What's the percentage of the 95% that lose, come back and make forex trading profitable even if marginally?

Hell, Warren Buffet lost $1.2B from currency investments in 05.

Ever stop to think a noob entering Forex sees that 95% figure being tossed around and asks him or herself why, finds the top 10 mistakes new traders...
All answered excellently by Czech!

Quoting akirax

EU just dropped 100 pips from 2890 and I caught 95% of it. back to business now.
They're great aren't they, those hindsight trades
  • #166
  • Sep 7, 2010 2:37am Sep 7, 2010 2:37am
Quoting Toothman

Bingo,
You have no idea how he trades yet you're perfectly comfortable telling us it won't work .
lol, you quoted my post which said.... "Can't comment on his strategy because I don't know what it is, although from what people have said in this thread it seems to be averaging with extremely small positions. On the face of it not an effective use of capital in my opinion.".... and interpreted that as meaning I was saying his strategy won't work! Really?

Quoting Toothman

So your way of trading is the only way and since you only need 10:1 leverage( or less) anyone else who prefers higher leverage to fit their trading strategy has to be a loser.
It's not a 'way of trading', it's simple money and risk management, do the math yourself, it's pretty basic stuff which you're really going to need to get a handle on if you ever expect to achieve anything close to consistent profitability.
  • #167
  • Sep 7, 2010 8:19am Sep 7, 2010 8:19am
Personally, 50:1 leverage is very much enough for me (and I'm a scalper). It doesn't bother me. But if it becomes 10:1, or even worse, 1:1, it's bye bye forex for me. It would be such a shame to lose the opportunity to trade such a dynamic market, one that I've put so much time into.

What you guys don't seem to understand or worry about is that it's not the 50:1 leverage that's worrying us, it's the obvious downtrend in available leverage, as mentioned by Akirax. This thread isn't so much "moaning" about the present (50:1 leverage), but rather the future. Where might they be going with these acts of regulation imposed on the way we trade instead of things like insurance of our funds?

Some of you guys are saying:

1) "Most" people who make money consistently in forex don't need more than 10:1 and the minority (of those successful traders) that DOES need higher leverage to make acceptable return on their investment (usually successful scalpers) can go to hell. All in the name of protecting the idiots who treat forex like an online casino -- which by the way got banned in the USA supposedly to "protect" people, but the real reason was simply because the regulators didn't want untaxed money going out of the country to offshore casinos instead of local ones.

2) If you are one of that minority that does use more than 10:1 to make a living, I got news for ya: Your strategy is a loser, it sucks.
LOL! Really? Well I got news for you: Your world is small.


This thread should be about us, the community of small/private retail traders who, having the privilege and the right to do so, put our hard-earned money on the line to participate in this free market (that's right, it's 2010 and you have the freedom and the RIGHT to trade/invest with the risk/reward ratio YOU choose). What are our thoughts on 50:1 leverage and, more importantly, how does/will this trend in regulations affect each of us?
  • #168
  • Sep 7, 2010 10:42am Sep 7, 2010 10:42am
Quoting Marv

Where might they be going with these acts of regulation imposed on the way we trade instead of things like insurance of our funds?
So lobby for that instead of more leverage, you'll stand more chance of someone in authority actually taking you seriously and more chance of the majority of traders supporting you.


Quoting Marv

Some of you guys are saying:

1) "Most" people who make money consistently in forex don't need more than 10:1 and the minority (of those successful traders) that DOES need higher leverage to make acceptable return on their investment (usually successful scalpers) can go to hell.
I don't remember anyone saying that.


Quoting Marv

2) If you are one of that minority that does use more than 10:1 to make a living, I got news for ya: Your strategy is a loser, it sucks.
I don't remember anyone saying that either.


Quoting Marv

you have the freedom and the RIGHT to trade/invest with the risk/reward ratio YOU choose
Sure you do, no-one's saying you don't. You also have the opportunity to trade within the leverage brökers are offering, if they ain't offering 100:1 then I guess you better go elsewhere in pursuit of a thrill, a fast buck, and a faster loss!
  • #169
  • Sep 7, 2010 2:52pm Sep 7, 2010 2:52pm
Quoting pipmutt
you better go elsewhere in pursuit of a thrill, a fast buck, and a faster loss!
If that's what you think leverage is for, then I got one thing to say to you too:

Your world is small.

Don't project on others your failure to use relatively-high leverage effectively to make good return on investment.
  • #170
  • Sep 7, 2010 3:57pm Sep 7, 2010 3:57pm
If you read between the lines of those cheering lower leverage levels, you'll detect this message, "I never figured out how to become a consistently profitable trader, so that means no one else could possibly have figured it out, and 10:1 or 50:1 means I'll LOSE MY MONEY MORE SLOWLY, and you all need to be protected from leverage levels like 200:1 and 100:1, as I do. Trust me! I know! I'm an experienced trader!"

Having said that, 50:1 is plenty of leverage to do very well if in fact you REALLY know how to trade.
Open to new approaches.
  • #171
  • Edited 9:57pm Sep 7, 2010 8:19pm | Edited 9:57pm
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Quoting Maxsmart
Czeck and all you guys that keep saying that you feel safer that the leverage has been limited (even though this doesnt make sense since a freedom is being stolen as outlined in the first post and you have the choice on how much volume of a currency to purchase ==rolling eyes anways..==)
I didn't say anything about leverage. =rolling eyes anyways=
Quoting maxsmart
you guys do realize that 90 percent of stock daytraders blow up their accounts as well. Stock daytraders that are not leveraged nearly as high as forex traders.
Good point, even without leverage trading is hard as hell!
Quoting maxsmart
What can we extrapolate from these statistics.
Trading itself can be very difficult, using a multiplying factor (leverage) should decrease the time it takes to get to the end result.

Quoting maxsmart
Most likely the cause of loss is that there are few traders with the stomach, and strategy to profit from short term whippy random movements.
Wait, what?? Did you just deduce HOW people are trading based on what percentage are losing?

Quoting maxsmart
It is the short term trading style, scalpers that are risky and not the leverage.[/b]
are you implying that limiting the leverage available would make risky scalps unprofitable? I think you're on to something.

[redacted]


For the record i don't give a damn what leverage anyone uses. The only caveat being that if my broker allowed unlimited leverage (or even very high leverage) i would certainly not want them to guarantee against a negative balance. There should probably be a required credit check before attaining unlimited leverage to pay back negative balances, as well.

In fact, as long as they're not using MY broker, I would prefer unlimited leverage. If you wanna see where the noobs are putting their cash check out the "trading systems" forum. If they could leverage their funds enough to actually effect liquidity then i see lots of opportunity!!

I haven't read any articles about the new regulation but i would assume that limiting the leverage has to do with regulating the market. That in order to guarantee things that come along with a regulated market, it is necessary to limit the leverage available, for reasons i don't yet care about.
  • #172
  • Sep 7, 2010 8:54pm Sep 7, 2010 8:54pm
Has anyone gone into the sleazy, perverted and crooked antics of the people who wrote these financial bills? Dodd and Frank?

Anyone who says 50:1 is fine and they don't need anymore might be telling the truth, but they are also lying. That is rationalizing capping your income. In this world, when is anything ever enough? It might make it much easier to not blow your 20 dollar micro-account that subprime dodd and ethics frank is protecting you from doing, but it also stops earnings. That's one thing we need in this economy right?
  • #173
  • Sep 7, 2010 9:54pm Sep 7, 2010 9:54pm
Quoting techno79
Has anyone gone into the sleazy, perverted and crooked antics of the people who wrote these financial bills? Dodd and Frank?
This is a great question and really close to my heart -- evolution of a Bill. I'm sure if we saw the truth, we would be on next plane to Panama.

Some good info here http://www.govtrackinsider.com/artic...whowritesbills
  • #174
  • Sep 8, 2010 1:15am Sep 8, 2010 1:15am
Quoting MetaCoder

Having said that, 50:1 is plenty of leverage to do very well if in fact you REALLY know how to trade.
lol, well make your mind up!


It's funny that in all these threads whinging about the reduction in leverage not one person has given an example of how they (would) use >50:1, not one. They want something but they have absolutely no idea what to do with it, or how to justify it! Classic!
  • #175
  • Sep 8, 2010 7:23am Sep 8, 2010 7:23am
Good job ignoring the points of my post.

Again, I'm not "whining about 50:1 leverage". Most, if not all here, aren't. I'm just concerned about where the hell this seems to be going. 10:1? That doesn't work for me.

Want an example of how 10:1 doesn't work for my style of trading and would kill most of my opportunities to make any good return on investment in my forex scalps?
  • #176
  • Sep 8, 2010 7:25am Sep 8, 2010 7:25am
Quoting akirax
AHH!!! now we see where you are coming from....It bothers you that when you started trading this market you had no leverage, no tools and it probably took you awhile to become profitable..

It urks you that a novice could start trading a high leverage account and by beginners luck or emerging skill that noob could potentially outperform ALL of your efforts in a much shorter amount of time and if skilled enough, make the proper corrections(eliminating bad trading habits and the like) while possibly doubling an account month after month...
I'm starting to agree. lol
  • #177
  • Sep 8, 2010 9:55am Sep 8, 2010 9:55am
Quoting Marv

Want an example of how 10:1 doesn't work for my style of trading and would kill most of my opportunities to make any good return on investment in my forex scalps?
Not p'ticularly, come back when it's 10:1
  • #178
  • Sep 8, 2010 9:58am Sep 8, 2010 9:58am
Quoting akirax

millions of colors to use on those charts, mutiple time frames, Japanese Candlesticks, Heikin-Ashi Candlesticks, Bars, Lines, Renko, Point and Figures, robots, forex chatrooms, forex signal, subscription services, forex tweets, facebook forex, forex factory, youtube forex, skype forex, robots, EAs, email alerts, pager alerts, visual alerts, audible alerts, moving averages, entry stops, entry limits, OCOs(thats One Cancels Other) and thousands of other indicators AND at one time had HIGH LEVERAGES.

Quoting Marv
I'm starting to agree. lol
Yep, that figures!
  • #179
  • Sep 8, 2010 1:14pm Sep 8, 2010 1:14pm
For those with FXDD us accounts would you open an account in Malta the fXDD MALTA is no NFA but they follow MFSA
  • #180
  • Sep 8, 2010 1:41pm Sep 8, 2010 1:41pm
Quoting pipmutt
It's funny that in all these threads whinging about the reduction in leverage not one person has given an example of how they (would) use >50:1, not one. They want something but they have absolutely no idea what to do with it, or how to justify it! Classic!

If I have a $10,000 account and I'd like to be conservative and risk 1% of my account on a trade, this is what I would do.

Instead of putting the whole $10,000 in my broker account, I'd only put $1,000 and keep the rest in a separate bank account. Then with 400:1 leverage I'd say that with my first trade, the max I could lose is $100, with a 30 pip stop I'd trade 3 mini lots with a margin requirement of $75. In the proposed situation of the idiotic 50:1 leverage, I'd have to put up $600 to do the same. It offends me to no end that seemingly "experienced" traders in this forum don't know the first thing about leverage vs actual risk.
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