High leverage trading - is it dangerous? | Forex Factory

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High leverage trading - is it dangerous?

  • #1
  • First Post: Apr 22, 2013 8:06am Apr 22, 2013 8:06am
normally in our early days we tend to over leverage and take high risk trades - So lets have a discussion to avoid the same and improvise to reach long term goals
finding A M S
  • #2
  • Apr 22, 2013 8:10am Apr 22, 2013 8:10am
lets start -- when i was in my early days --- around 3 years back ( 2010) i was very eager to average the positions and in turn used highest leverage possible . but the position once comes in profit it tells us to book the profits -- i mean its human tendency that in profits we book it but when it comes to losses we always wait and wait ...............
finding A M S
  • #3
  • Apr 22, 2013 8:30am Apr 22, 2013 8:30am
Quoting prashant7
normally in our early days we tend to over leverage and take high risk trades - So lets have a discussion to avoid the same and improvise to reach long term goals
Not just your early days. Achieving trading discipline is a long long long road. You can be very experienced but get a bit over confident one day and blow 10% of your account on a 'sure thing' - then loose another 40% in the next 30mins trying to get your big loss back. It can and does happen to experienced traders. As soon as you think you are a good trader and you let your MM slip this kind of loss is almost inevitable. It's not something that fades with experience it is something you need to actively approach and consider at some depth.

btw what do you mean by 'improvise'?
  • #4
  • Apr 22, 2013 9:29am Apr 22, 2013 9:29am
If you are a sniper* trader, by using high leverage trading method is not an issue. *Sniper: Higher probability trades, right trade is more than wrong trade.

If you are strategy* trader, by using appropriate leverage trading method is the right option. *Strategy: Know outcome A, B, or C could produce what RR in relation with leverage.

IMO, if you know what you are doing, by using high leverage trading is not a problem. Apply the rules in right places, right time, and right scenario, would give you good result, since there are so many combination of trading method. Meaning to say trading rules is subjective. In fact, bullshit in FF is easy, but in trading you need to do a lot of homework.
  • #5
  • Apr 23, 2013 3:58am Apr 23, 2013 3:58am
"If you've got a big account and are using high leverage to its full potential, then I salute you sir, as you have considerably bigger balls than I do."
  • #6
  • Apr 23, 2013 4:25am Apr 23, 2013 4:25am
Quoting GDR3k
"If you've got a big account and are using high leverage to its full potential, then I salute you sir, as you have considerably bigger balls than I do."
you made my day

i think leverage used will depend on your account size and goals

i will not use a leverage for an account = or more than 500000$

but for an account less i could use it from 2:1 up to 50:1 as i try always to be committed to

as i said it depend on your account size and your goals and i believe foreign exchange trading is about

preserving your equity and gains will come at the end of the equation as a result of wise capital risk

management

all have a nice day
focus while relaxed to see better
  • #7
  • Jun 6, 2013 9:48pm Jun 6, 2013 9:48pm
We use high leverage to trade more with low amount using in trading but high leverage is dangerous because it increase our risk per pips .As much it will be high Our money will be more in risk.So it is decided to use appropriate leverage ,Ihigh leverage sometimes become a killer
Master Forex ║ bonus up to 75% ║Minimum deposit $1 ║Swap free trading
  • #8
  • Jun 6, 2013 10:20pm Jun 6, 2013 10:20pm
Quoting Master Forex
We use high leverage to trade more with low amount using in trading but high leverage is dangerous because it increase our risk per pips .As much it will be high Our money will be more in risk.So it is decided to use appropriate leverage ,Ihigh leverage sometimes become a killer
I don't know why you dug this up from the appalling past but you are
WRONG !!!

Higher leverage does not increase YOUR RISK PER PIP. Pip VALUES ARE THE SAME.
Your username may be "MasterForex" but you seem to have NO IDEA of what
you're talking about

Higher leverage decreases your margin requirement. Therefore, you can "trade more with less".
But if you risk 2% of your account it's just THAT, no matter your leverage

I hope you get that
When the Joker is in the deck.. fear not and play it well
  • #9
  • Jun 6, 2013 10:40pm Jun 6, 2013 10:40pm
PS.... I am (for better or worse) still a US resident. If you are that
then you know that is HAS BEEN DECIDED FOR YOU that you can't
trade with more than 50/1 leverage
You are not allowed to trade spot gold
Or silver

HOW does that make you feel better ????????
When the Joker is in the deck.. fear not and play it well
  • #10
  • Jun 6, 2013 10:46pm Jun 6, 2013 10:46pm
It's so much Fun ...............!
The More You Learn, The More You Earn.....
  • #11
  • Jun 6, 2013 10:51pm Jun 6, 2013 10:51pm
Quoting forexalien
It's so much Fun ...............!
Go ahead and be an ass.
I'll see ya' on the flip side
K ?
When the Joker is in the deck.. fear not and play it well
  • #12
  • Jun 6, 2013 11:16pm Jun 6, 2013 11:16pm
with R; R 1; 1--------trade with a lot amount----------
you can get rich quick
may also quickly go bankrupt
does not seem so dangerous ,,, I think ..as long as you've prepared everything if something happens,, ha,ha, ha,
if there is something you should keep secret,simply just save it,, so, just
  • #13
  • Jun 6, 2013 11:31pm Jun 6, 2013 11:31pm
Quoting sandycarrot
with R; R 1; 1--------trade with a lot amount---------- you can get rich quick may also quickly go bankrupt does not seem so dangerous ,,, I think ..as long as you've prepared everything if something happens,, ha,ha, ha,
I don't really get that. Do you think that risking 3% using high leverage
is different than risking 3% with lower leverage ??

All "guffaws" aside, don't you know better ??
When the Joker is in the deck.. fear not and play it well
  • #14
  • Jun 6, 2013 11:33pm Jun 6, 2013 11:33pm
I forget the cartoon..................



begging your pardon
When the Joker is in the deck.. fear not and play it well
  • #15
  • Jun 6, 2013 11:35pm Jun 6, 2013 11:35pm
Quoting sandycarrot
with R; R 1; 1--------trade with a lot amount---------- you can get rich quick may also quickly go bankrupt does not seem so dangerous ,,, I think ..as long as you've prepared everything if something happens,, ha,ha, ha,

So what is it that you really had to say ???

SAY IT !!
When the Joker is in the deck.. fear not and play it well
  • #16
  • Jun 6, 2013 11:38pm Jun 6, 2013 11:38pm
I'm waiting
Mr. Carrot
When the Joker is in the deck.. fear not and play it well
  • #17
  • Jun 6, 2013 11:58pm Jun 6, 2013 11:58pm
High leverage is lethal. You might think that you're only putting in a small amount $100 or so. So, what's the harm, right? Worst case, you lose $100. And best case, you make a few million and retire.

WRONG! It messes up your psychology. Never ever get caught up in that. EVER. Not even in Demo. Not because someone posted some stupid challenge in an online forum. You have nothing to prove to anyone but yourself. Trade every single time like you're trading for the long term. Whether it is with $100, $1000 or $10,000,000 or a demo account.

What if you don't have the money to start with a nice sized account?
Get off the computer, get a job and earn that money. Save up and in the meanwhile, learn the following:
1. Don't overleverage.
2. Never ever ever ever average down. Not even if god comes down to you and says that the market is going to reverse soon. Losers average losers.
3. Create a system and stick to it. Don't look for quick easy money.

Alternatively, you can get better at trading, by trading small amounts and then get your family and friends to invest with you. You have better odds of winning the lottery than making 100% a week for an extended period of time.
  • #18
  • Jun 7, 2013 6:20am Jun 7, 2013 6:20am
Of course it is dangerous. There is a word saying "High Risk with High Return" in Chinese.

IMO, it definitely has method to control the game, but usually trading with high leverage required big capital to equalize the SL and TP for long term trading. As an example, account balance $1000 is the minimum level to trade X games/trades for the leverage 1:YYY, so 1 lot might cost 1 dollar per 1 pips movement because SL and TP is fixed in accordance to the system objective. So if you increase the leverage, then you only can trade less than X games/trades for account balance of $1000 due to 1 lot size cost maybe 10 dollars per 1 pips movement for the same SL and TP.

So in order to have proper trading with high leverage, the trader need to do math. There is no such things of you will get better result for high leverage trading, because you cannot change the probability of one system.
  • #19
  • Jun 7, 2013 6:34am Jun 7, 2013 6:34am
Quoting Slim Buffett
{quote} Go ahead and be an ass. I'll see ya' on the flip side K ?
But it is, If you are good at trading................
The More You Learn, The More You Earn.....
  • #20
  • Jul 7, 2014 11:53pm Jul 7, 2014 11:53pm
yes it is dangerous http://www.forexfactory.com/showthre...04#post7588104
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