None taken Tom.
Dayum, I hate using portable with virtual keyboard
Dayum, I hate using portable with virtual keyboard
EurAnalysis Kindergarten 24 replies
DislikedI think the level of leverage depends on the method that is used. if our method allows to work with tight stops, then, with the same amount at risk, the position size may be larger assuming greater leverage.Ignored
DislikedSome excellent posts. The lure of the Forex is for most, a chance to play the wheel of fortune.
The time frame traded can be the impediment to success.
Small accounts are enticed by the leverage and end up trading small time frames. Intraday volatility does the dirty work and the small account gets cleaned out.
Small accounts should trade the larger time frames where risk is managed by reducing the volatility that larger time frames entail. A move on the 5 minute or 10 minute bar can look fantastic but on the daily does not even come near to breaking...Ignored
Dislikedthanks for accepting my voucher.
its a very good and relevant question,appreciated for asking.all the great religions has looked down upon usury and islam is the only religions which has outright make it illegal in a very clear manner.take for example judaism,it make it illegal for jews to take usury from thier brothers and other jews but they can charge usury on gentiles and thier enemies which muslims believe is interpolation and changes in law of god by later jews.jesus christ[pbuh] came to rectify that which one can see when he run after moneychangers...Ignored
DislikedWith low leverage, a trader/investor does not need a tight stop to limit losses. In fact as long as the trade in entered at a swing high anticipating a move lower (or a swing low anticipating a move higher), then you may not need to take a loss, and if you do, most likely only a small one which will be cancelled out by an additional recovery position for what will most likely be a net gain.
In contrast, using high leverage, you have no choice but to take a loss if price moves against you because your risk limit is reached much quicker and before...Ignored
Floating Rate Notes are variable rate notes. If you hold them and rates increase, for instance, you don’t suffer a capital loss. Since the beginning of the crisis, the US Treasury has basically issued fixed rate debt. The long term portion of it, courtesy of Operation Twist, is being massively bought by the Fed. The short end, is accumulating in the balance sheets of the primary dealers. If interest rates were to rise, these dealers would suffer untold capital losses, and it would be politically difficult to bail them out. Therefore, the same dealers are pushing the US Treasury to slowly start refinancing this short-term fixed rate notes in their inventory with floating rate notes. That way, by the time interest rates rise, the problem will have already been transferred to the US taxpayer, who will be in a deeper hole.
What does all this have to do with our previous analysis of the repo market? Well, if floating rate notes are issued, they will have a strong bid from money market funds and liquidity will be enhanced in the repo market, which would continue funding the commodity futures markets.
However, with the US Treasury facing a higher fiscal cliff, the Fed would be forced to intervene buying not only the long-term, but the also short-term debt, to ensure that inflation transforms these higher nominal short-term rates into lower “real” rates. The Fed would not do this only to save the US Treasury, but also the private sector. Why? As short-term liquidity shifts from commercial paper to government-issued floating rate notes, levered companies (and we just said companies are pushing leverage) would have a hard time finding short-term working capital funding. Potentially, and only years ahead, this could well end in situations seen in Latin America, where banks offered weekly or weekend guaranteed investment certificates at high rates. Gold, again, would end up being “the” store of value. But this, this is years ahead and in the making.
DislikedThis quote is gold.
However, those who are undercapitalized fail to accept it. It takes money to make money while reducing risk.
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DislikedHi Tom,
I think you may have misunderstood what Ken was trying to say.
With low leverage, a trader/investor does not need a tight stop to limit losses. In fact as long as the trade in entered at a swing high anticipating a move lower (or a swing low anticipating a move higher), then you may not need to take a loss, and if you do, most likely only a small one which will be cancelled out by an additional recovery position for what will most likely be a net gain.
In contrast, using high leverage, you have no choice but to take a loss if price moves...Ignored
Disliked
what allowed the account 2 leverage? not the undercapitalization but
the method used by the account 2 which gives best entries, closer to the stop zone and therefore allows tighter stops.
if E/U gets 1.2450 both accounts will be stoped out with 1% loss, regardless of the level of capitalization.Ignored
DislikedHowever, there is another way to see it.
Consider the psychological impact as described by the utility curve below. For those with 100K, losing 1K does not create much interest versus the pain of losing 100 for those whose account is 10K.
The point: greed and pain intensity depends on the account size. To trade well we need to make sound decisions. When the mind is disturbed the quality of the decision drops. Leverage increases the emotional commitment and therefore clouds our decision making abilities. It is not that leverage is bad, but that...Ignored
Dislikedamusing to see people trading with 100k , i wish i could have that.
start from scratch is really painful, atleast im still youngIgnored