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Thoughts on 50:1 Leverage

  • #181
  • Sep 8, 2010 12:12pm Sep 8, 2010 12:12pm
Quoting Pipologist99
It offends me to no end that seemingly "experienced" traders in this forum don't know the first thing about leverage vs actual risk.
My sentiments exactly.
  • #182
  • Sep 8, 2010 12:35pm Sep 8, 2010 12:35pm
Quoting Pipologist99
It offends me to no end that seemingly "experienced" traders in this forum don't know the first thing about leverage vs actual risk.



Yup......... I have to throw a smiley (or two) at that sentiment myself.





  • #183
  • Sep 8, 2010 1:16pm Sep 8, 2010 1:16pm
Quoting Pipologist99

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.....
The deposit protection issue has already been mentioned in this thread here, here, and here, and probably numerous other places, obviously you either missed it or you've dived into a discussion without looking. Either way not a good trait for a potential trader (assuming you're actually trying to become a trader of course!)

As already mentioned, deposit protection isn't the reason some of these guys are moaning, they don't actually have the funds to begin with yet they want to trade as if they do! I'm sure you can see the pitfalls of doing that, right?


Quoting Pipologist99

It offends me to no end that seemingly "experienced" traders in this forum don't know the first thing about leverage vs actual risk.
I agree! Mind you it doesn't really offend me, it just goes some way to explaining the failure statistics, it's hardly a surprise that some people can't understand the connection!
  • #184
  • Edited 1:39pm Sep 8, 2010 1:26pm | Edited 1:39pm
This is going nowhere and is stupid, it's just arguments now.

title of the thread: Thoughts on 50:1 Leverage

50:1 leverage is plenty. I understand the argument of using the crazy 200-400:1 leverage if you want to deposit less money with your broker while still limiting your risk, as you would if you had all your funds deposited. Find a broker that you can trust with your funds. Do you really feel that unsafe depositing a bit more? an as pip just said, this was discussed numerous times... we get it. That is the only legit reason to me, yet the solution is simple.

For those that are saying they need crazy amounts of leverage to weazel there way out of losing trades or to diverse there portfolio's or whatever... I don't know what to tell you. As I said, what happens when you finally make enough to deposit with a tier 2 broker? your never going to get 100:1. And furthermore, with that strategy I doubt you ever will get to that level.

As I said, I think you are all whining because you need this extra leverage as you are under capitalized and stuck in dreamland where you can get rich quick with a few hundred/thousand bucks with some holy grail mechanical system when you finally find it.

Or.. your just whining about your rights being taken away... "They took our leverage away!!! OMG!! even if we don't use it, they are taking something away from us that we should have a right to use if we want". Ok, but what's the real reason? probably the paragraph above this one...
  • #185
  • Sep 8, 2010 1:29pm Sep 8, 2010 1:29pm
Quoting pipmutt

I agree! Mind you it doesn't really offend me, it just goes some way to explaining the failure statistics, it's hardly a surprise that some people can't understand the connection!
I doubt that leverage has much to do with the failure statistics. Those stats are nearly the same in every entrepreneurial endeavor, whether it's trading stocks or selling Amway. So tell me how leverage comes into play when you're trying to sell a box of soap (that's a statement, not a question).

pipmutt, I see why you use the little "parsimony rules" tag. You are over-simplistic and often halt the advance of progress. It fits you perfectly.
  • #186
  • Sep 8, 2010 1:36pm Sep 8, 2010 1:36pm
Pipmutt, I've read the entire thread, all 13 pages of it and I've seen you mention that you are fine trading with 10:1 leverage. So who cares? 99% of the trading community would rather have the choice with the amount of leverage they want to use (Yes I did pull that straight out of my behind, but who cares?) You are not the gate-keeper of poor unsuspecting newbies, they understand the risks they take when they open their $25 accounts, my question is WHY do you care?

I don't think you still understand that leverage and actual risk per trade are ***NOT*** the same thing. If you did, you wouldn't still be talking about the *DANGERS* of high leverage.... Why do you care that some people use forex as a lottery ticket, frankly it's none of ur business.

And whether or not security of funds is an issue, I'd like to have that choice.
  • #187
  • Sep 8, 2010 1:38pm Sep 8, 2010 1:38pm
Quoting TradeRunner

So tell me how leverage comes into play when you're trying to sell a box of soap (that's a statement, not a question).
I realized it was a statement, and again goes some way to explaining the failure stats in other types of business as well as trading, people don't think or prepare, and they have no idea of what they're getting into. The inevitable happens, to be frank it would be a surprise if it didn't!

Quoting TradeRunner
pipmutt, I see why you use the little "parsimony rules" tag. You are over-simplistic and often halt the advance of progress. It fits you perfectly.
On the contrary, it's people who overcomplicate a simple process (like trading) who stunt their own growth! How many times do you read of novice traders who finally see the light clearing their charts and minds and subscribing to the KISS principle. Simple gets the job done, why make work for yourself unnecessary, especially when it's non-productive the majority of the time.
  • #188
  • Sep 8, 2010 1:44pm Sep 8, 2010 1:44pm
Quoting Pipologist99

You are not the gate-keeper of poor unsuspecting newbies
No, fortunately not! I wouldn't wish that task on my worst enemy!

Quoting Pipologist99
my question is WHY do you care?
lol, who said I care, I'm just replying to inane comments from people who object to the reduction in leverage seemingly without any justifiable reason. It's a done deal anyway, why moan and whinge?

Quoting Pipologist99
I don't think you still understand that leverage and actual risk per trade are ***NOT*** the same thing.
Are you saying they're not connected? Seriously?



Anyway back later, I look forward to your comments, this should be fun........
  • #189
  • Sep 8, 2010 1:45pm Sep 8, 2010 1:45pm
Quoting pipmutt
I realized it was a statement, and again goes some way to explaining the failure stats in other types of business, people don't think or prepare, and they have no idea of what they're getting into. The inevitable happens, to be frank it would be a surprise if it didn't!
Which again, has absolutely nothing to do with high leverage. If 95% of those who try to sell a box of soap fail then borrowing the money to buy the box of soap isn't going to help.
  • #190
  • Sep 8, 2010 1:46pm Sep 8, 2010 1:46pm
Quoting pipmutt
No, fortunately not! I wouldn't wish that task on my worst enemy!


lol, who said I care, I'm just replying to inane comments from people who object to the reduction in leverage seemingly without any justifiable reason. It's a done deal anyway, why moan and whinge?


Are you saying they're not connected? Seriously?

I explained that in my previous post. Now you come up with a counterpoint and illustrate your point, that's an actual civil discussion.
  • #191
  • Sep 8, 2010 1:48pm Sep 8, 2010 1:48pm
Quoting Monroe
T

Or.. your just whining about your rights being taken away... "They took our leverage away!!! OMG!! even if we don't use it, they are taking something away from us that we should have a right to use if we want". Ok, but what's the real reason? probably the paragraph above this one...
And what would you be saying if the new rules stated that you could only use 400:1 leverage. Would you be whining about your rights then?

Maybe YOU don't give a damn about your "rights" but some people do.
  • #192
  • Sep 8, 2010 1:54pm Sep 8, 2010 1:54pm
Quoting TradeRunner
And what would you be saying if the new rules stated that you could only use 400:1 leverage. Would you be whining about your rights then?
That's not the rule now is it TradeRunner, which is a stupid what-if statement if you ask me. But hey, if that rule comes, maybe I'll start a thread and whine about it on FF, or maybe I'll just figure something out and roll with the punches.

Do you think it was really anyone's "rights" to trade 400:1?
  • #193
  • Sep 8, 2010 2:02pm Sep 8, 2010 2:02pm
Quoting Monroe
That's not the rule now is it TradeRunner, which is a stupid what-if statement if you ask me. But hey, if that rule comes, maybe I'll start a thread and whine about it on FF, or maybe I'll just figure something out and roll with the punches.

Do you think it was really anyone's right to trade 400:1?
No, just as it isn't anyone's "right" to trade 2:1 or to trade Forex at all or even stocks for that matter.

So I guess you'll have to "roll with the punches" if they someday decide to ban Forex trading all together.

Maybe you can just give everything to the Government and let them take care of you. Sooooooooo much simpler, don't you think.
  • #194
  • Sep 8, 2010 2:05pm Sep 8, 2010 2:05pm
Quoting TradeRunner
No, just as it isn't anyone's "right" to trade 2:1 or to trade Forex at all or even stocks for that matter.

So I guess you'll have to "roll with the punches" if they someday decide to ban Forex trading all together.

Maybe you can just give everything to the Government and let them take care of you. Sooooooooo much simpler, don't you think.
Yes, I guess I would. I don't want to take this way off topic and argue about bullshit, that's what I don't want. I don't want them to ban forex trading, just like all of you don't. It seems a lot of you are fearing less leverage in the future... I would worry about other things.

I just said my thoughts on 50:1 leverage, and I haven't yet heard one good reason for needing 400:1 to begin with.
  • #195
  • Sep 8, 2010 2:11pm Sep 8, 2010 2:11pm
Is it just me or does the forex market seem "dead" the last couple of months after the 100:1 leverage rule took effect? This news really hit me hard because I rely on leverage to magnify my winnings. I dont have millions of dollars to trade with and be settled with 10% gain a year. I have to use high leverage as often as possible to make a meaningful return. I trade forex for a living so a slow market along with lower leverage will make it virtually impossible to thrive even though I am consistently profitable. I guess it will just take longer to amass my fortune now. F the dumbass US government.
  • #196
  • Sep 8, 2010 2:20pm Sep 8, 2010 2:20pm
Quoting Pipsqueak
I dont have millions of dollars to trade with and be settled with 10% gain a year. I have to use high leverage as often as possible to make a meaningful return. I trade forex for a living so a slow market along with lower leverage will make it virtually impossible to thrive even though I am consistently profitable. I guess it will just take longer to amass my fortune now. F the dumbass US government.
Exactly!
  • #197
  • Sep 8, 2010 2:28pm Sep 8, 2010 2:28pm
You can get more then 10% a week with 10-20:1 leverage... and that's just being conservative.
  • #198
  • Sep 8, 2010 3:23pm Sep 8, 2010 3:23pm
Just my 2 cents.

For those of us who grew up in the US, I believe it is a hard pill to swallow no matter what freedom is taken away. We grew up with the 'land of the free', home of the brave concept in our minds, our hearts and spirit.

There are supposed "MASTER" multi-billionaire traders on here equating risk to leverage.

For those with clean minds and pure hearts that choose to make a lot of money in life, then please do not get swallowed by these people.

We are only limited by what we CHOOSE to accept.

I believe that is the difference between the American Culture and most foreign cultures. Not saying America is blah blah blah, but that is one of the true great guiding principals we have all lived off of for decades.

However, we don't form a coupe as we silently get frustrated either...
We are our own best indicator.
  • #199
  • Sep 8, 2010 6:36pm Sep 8, 2010 6:36pm
"There are supposed "MASTER" multi-billionaire traders on here equating risk to leverage."

Madness I know!
  • #200
  • Sep 8, 2010 7:17pm Sep 8, 2010 7:17pm
Very deceitful to even suggest something stupid like "anybody can make easily 10% or more on a conservative strategy a week". That is just in its own a blunt lie, go and look up what conservative means.

Firstly why would anybody with the right mind even look at weekly gains trading Forex?
Secondly why would anybody believe some insane statement when there is no proof at all that such event has even occurred?
Last point here in Australia any professional, if you are one (doubt it very much), making such statements to retail folks would have ASIC on their neck and would be investigated for and backwards.

So here we are, the same people on this thread looking at weekly gains without any reference and proof on their longterm gains lecturing other people on how stupid they are in having high leveraged accounts.

The true colors have finally come out. Insane
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