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  • #931,621
  • Oct 25, 2014 12:56pm Oct 25, 2014 12:56pm
Quoting Lacunoide
{quote} Actually he is right, what matters is what percentage of your account you risk per trade. Leverage is good if used correctly.. Obviously if you open 5 lot with high leverage with a small account, you are a goner but used correctly is very useful, if you got low balance leverage is a necessity... If you have 1.000$ some degree of leverage is necessary. If you have 10K then low leverage is okay.
He is not right. High leverage will kill your account, no matter how small is your risk per trade. Don't believe my words, open a demo account and see it for yourself.

Few years ago, I closed a 7 full lot trade 100:1 leverage one minute after Asia Close, because spread went beyond my imagination. The pa moved more than 700 pips in my direction in next few weeks and over 100 pips in a couple of hours after I closed the trade .................. and that was not a demo account
The Thief of Wall Street
  • #931,622
  • Oct 25, 2014 1:03pm Oct 25, 2014 1:03pm
Quoting Chicky
{quote} He is not right. High leverage will kill your account, no matter how small is your risk per trade. Don't believe my words, open a demo account and see it for yourself.
No, if you are a kamikaze trader you are a goner any way, but for a "serious" trader with little capital, you need leverage, otherwise your are allocating a lot of your money to margin.

An account with leverage 1:200 is fine.

Trading with a small account with lev 1:50 is a bad idea..... Most of your money will go only into margin requirement, reducing your trading opportunity.

And you will be less able to manage Drawdown...


proft per pip is the same if you use 1:50 o 1:200 o 1:500 but your margin requirement will be massive.




with 1.000$ and lev 1:50 if you open 5 positions of 0.01 (on eurusd in this example) size you will use about 126.68 USD of margin that's about 12% of your account used only for margin.

With lev 1:200 will be only 31.67 USD, that is much better.
Buy at the Low, Sell at the High You make money by waiting not by trading.
  • #931,623
  • Edited 10:57pm Oct 25, 2014 1:31pm | Edited 10:57pm
Quoting Lacunoide
{quote} No, if you are a kamikaze trader you are a goner any way, but for a "serious" trader with little capital, you need leverage, otherwise your are allocating a lot of your money to margin. An account with leverage 1:200 is fine. Trading with a small account with lev 1:50 is a bad idea..... Most of your money will go only into margin requirement, reducing your trading opportunity. And you will be less able to manage Drawdown... proft per pip is the same if you use 1:50 o 1:200 o 1:500 but your margin requirement will be massive. with 1.000$...
High leverage is not a solution for under-capitalization. It has several disadvantages. Price change in currencies is so small in percentage terms that dealers offer leverage, but excessive leverage makes it very risky. One should remain within reasonable limits, the expected return should be more than any other business but not crazy. If we try to exploit leverage facility, will ultimately fail because of the risk involved.
The Thief of Wall Street
  • #931,624
  • Oct 25, 2014 1:39pm Oct 25, 2014 1:39pm
Quoting Chicky
{quote} High leverage is not a solution for under-capitalization. It has several disadvantages. Price change in currencies is so small in percentage terms that dealers offer leverage, but excessive leverage makes it very risky. One should remain within reasonable limit, the expected return should be more than any other business but not crazy. If we try to exploit leverage facility, will ultimately fail because of the risk involved.
I agree. Leverage must be used correctly. But without it, most of little traders will not be able to trade. So there is not way around.
Buy at the Low, Sell at the High You make money by waiting not by trading.
  • #931,625
  • Oct 25, 2014 2:13pm Oct 25, 2014 2:13pm
Quoting Chicky
{quote} He is not right. High leverage will kill your account, no matter how small is your risk per trade. Don't believe my words, open a demo account and see it for yourself. Few years ago, I closed a 7 full lot trade 100:1 leverage one minute after Asia Close, because spread went beyond my imagination. The pa moved more than 700 pips in my direction in next few weeks and over 100 pips in a couple of hours after I closed the trade .................. and that was not a demo account


Hi Chicky,

one can not argue/discuss with people who think, that leverage is the solution for under-capitalized accounts. I fear the have to make the (bad) experience themselves........

Funny thing is, that some people still confuse the leverage your broker attributes to your account with the leverage you take in reality with each trade (and how the risk goes up when adding positions).

In the end one gets the impression, that leverage makes a good trader out of a bad one
  • #931,626
  • Edited 10:55pm Oct 25, 2014 2:49pm | Edited 10:55pm
Quoting infinitus
{quote} Hi Chicky, one can not argue/discuss with people who think, that leverage is the solution for under-capitalized accounts. I fear the have to make the (bad) experience themselves........ Funny thing is, that some people still confuse the leverage your broker attributes to your account with the leverage you take in reality with each trade (and how the risk goes up when adding positions). In the end one gets the impression, that leverage makes a good trader out of a bad one
I am currently trying to dig into my earlier days of trading, what mistakes I did, what I didn't do, etc. etc. I was surprised to note that how correct I was and how wise my thoughts were when I decided to enter currency trading. Then got carried away, wasted several years only because I forgot why I was here. It is so simple to make money in this market that sometimes I fear rules won't remain the same for long.

I believe many start currency trading to beat the system, find a holy grail that either gives profit or break-even. There are many methods that generate more gains than losses, many many methods. However, the only requirement of all those methods is to 1) Control your risk or Money Management, 2) Patience.
The first mistake people do is underestimating the risk involved. The second mistake is getting impatient. They defy the very first rules of the business. I don't blame them for the first, because it takes some time in mastering money management. The third mistake is deviating from a logical method. I don't see any logic in methods like buy/sell on MA Crossovers, touching 20 or 200 whatever SMA/EMA, etc. A logical method to me is the one that involves longer term and shorter term fundamental factors combined with some simple technical like session/day/week open, closes, historical support/resistances, etc.

Unleashed leverage tempts a person in deviating from his/her method. "this one time" thinking never works. Even if works, yielding 500% return in one day what good is that 500%? They know this 500% one time win is not sustainable and they are still there from where they started, that is, no method that beats the system. Many object on my demo trading bursting account after account. Why I do this? I do this to convince myself and store in my subconscious mind that it never works, or even if it works has no worth.

A smart trader would find an edge (something that happens more than half the time) and then practice application of this edge, fine tuning the method, forgetting how long it takes. Willing to invest 4, 5 or 10 years. It ultimately pays off.
The Thief of Wall Street
  • #931,627
  • Oct 25, 2014 4:33pm Oct 25, 2014 4:33pm
Quoting Chicky
{quote} I am currently trying to dig into my earlier days of trading, what mistakes I did, what I didn't do, etc. etc. I was surprised to note that how correct I was and how wise my thoughts were when I decided to enter currency trading. Then got carried away, wasted several years only because I forgot why I was here. It is so simple to make money in this market that sometimes I fear rules won't remain the same for long. I believe many start currency trading to beat the system, find a holy grail that either gives profit or break-even. There are...
Pure gold. Archived and Thanks.
Don't be smart. Be rich.
  • #931,628
  • Oct 25, 2014 4:59pm Oct 25, 2014 4:59pm
Quoting Chicky
{quote} I am currently trying to dig into my earlier days of trading, what mistakes I did, what I didn't do, etc. etc. I was surprised to note that how correct I was and how wise my thoughts were when I decided to enter currency trading. Then got carried away, wasted several years only because I forgot why I was here. It is so simple to make money in this market that sometimes I fear rules won't remain the same for long. I believe many start currency trading to beat the system, find a holy grail that either gives profit or break-even. There are...
  • #931,629
  • Oct 25, 2014 5:26pm Oct 25, 2014 5:26pm
Quoting Chicky
{quote} I am currently trying to dig into my earlier days of trading, what mistakes I did, what I didn't do, etc. etc. I was surprised to note that how correct I was and how wise my thoughts were when I decided to enter currency trading. Then got carried away, wasted several years only because I forgot why I was here. It is so simple to make money in this market that sometimes I fear rules won't remain the same for long. I believe many start currency trading to beat the system, find a holy grail that either gives profit or break-even. There are...
I would sadly have to agree with what Chicky said here. I consider myself now upper intermediate trader (in that 70% of my last 20 trades have been accurate and done what I had hoped) but money management is something that has made me not move forward until recently. The problem with the 'one big winner' is that you are left with a nagging sense of 'that was lucky' but it wasn't really something I can do regularly. It is an empty hollow victory because it is not sustainable and you know that one day it will go against you, sinking your ship. What is far more satisfying is building up years of proper victories that develope a confidence and slowly builds your capital but best of all, you have a method you can trust! All the pros say the same thing, they all advocate money management (although using a bit more here and there on a no brainer trade is fine by me. Secondly I trade the Majors ( 5 pairs ) and 2 others that I know won't have sudden massive spread differences! Anyway, my 2 cents and I trade with real money and not fulltime although I trade 2 or so times a day on average...Trading is a funny game, the faster you try and make lots of money, the slower you actually get there. When you just let go of that, focus on trading really well, the profits just come! It's definitely a mind game!
  • #931,630
  • Oct 25, 2014 10:46pm Oct 25, 2014 10:46pm
Quoting maximinus
{quote} Yeah! Miguel Darling rule this thread with his soft power. No one can resist. Good week end. https://www.youtube.com/watch?v=-A39Mv4nr0o
Soft power

Inserted Video
The Thief of Wall Street
  • #931,631
  • Oct 26, 2014 3:04am Oct 26, 2014 3:04am
Quoting Chicky
{quote} Could you kindly elaborate your statement. If one believes in lower or even moderate risk per trade, what is the purpose of high leverage? What leverage mutual funds, banks and other financial institutions use for their short or longer term currency trading operations? Brokers who offer high leverages, what level of leverage they use for their own trades, if they have short or long term trading operations in addition to brokerage operations? If one narrows down stop loss, how many times can survive spread widening and normal market fluctuations?...
Most do not even survive to see these days ...
"It's the Margin, Stupid."
  • #931,632
  • Oct 26, 2014 3:14am Oct 26, 2014 3:14am
Quoting Chicky
{quote} I am currently trying to dig into my earlier days of trading, what mistakes I did, what I didn't do, etc. etc. I was surprised to note that how correct I was and how wise my thoughts were when I decided to enter currency trading. Then got carried away, wasted several years only because I forgot why I was here. It is so simple to make money in this market that sometimes I fear rules won't remain the same for long. I believe many start currency trading to beat the system, find a holy grail that either gives profit or break-even. There are...
I misjudged you I guess. I tought you were here just for practical jokes. Perfect explanation of your experience which I am sure many have or already experiencing. Thanks.
  • #931,633
  • Oct 26, 2014 3:38am Oct 26, 2014 3:38am
Quoting Lacunoide
{quote} Actually he is right, what matters is what percentage of your account you risk per trade. Leverage is good if used correctly.. Obviously if you open 5 lot with high leverage with a small account, you are a goner but used correctly is very useful, if you got low balance leverage is a necessity... If you have 1.000$ some degree of leverage is necessary. If you have 10K then low leverage is okay.
Agree with you
Forex as Leverage
  • #931,634
  • Oct 26, 2014 3:49am Oct 26, 2014 3:49am
Quoting P.technique
{quote} I misjudged you I guess. I tought you were here just for practical jokes. Perfect explanation of your experience which I am sure many have or already experiencing. Thanks.
To give Chicky credit, i think he is one of the best on this forum to talk about the " philosophy of trading ". He is well informed on many aspects of trading and sometimes offer thoughtful insights ...
"It's the Margin, Stupid."
  • #931,635
  • Oct 26, 2014 6:59am Oct 26, 2014 6:59am
hey guys. is stress test result ok???
don't find the correct answer in market. just feel it and follow the wave.
  • #931,636
  • Oct 26, 2014 7:13am Oct 26, 2014 7:13am
http://www.bbc.co.uk/news/business-29777589

stress test results. not great, but not that bad, imo.

"Twenty-four European banks have failed stress tests of their finances, the European Banking Authority has announced.".......
  • #931,637
  • Oct 26, 2014 7:28am Oct 26, 2014 7:28am
Quoting Chicky
{quote} I am currently trying to dig into my earlier days of trading, what mistakes I did, what I didn't do, etc. etc. I was surprised to note that how correct I was and how wise my thoughts were when I decided to enter currency trading. Then got carried away, wasted several years only because I forgot why I was here. It is so simple to make money in this market that sometimes I fear rules won't remain the same for long. I believe many start currency trading to beat the system, find a holy grail that either gives profit or break-even. There are...
Beautiful post, Chicky. I fully agree! Thanks mate
You reap what you sow.
  • #931,638
  • Oct 26, 2014 7:33am Oct 26, 2014 7:33am

  1. EUR/USD will go up until 29 oct and after focm will go very very down

  • #931,639
  • Oct 26, 2014 7:44am Oct 26, 2014 7:44am
Quoting hassan561
EUR/USD will go up until 29 oct and after focm will go very very down
Seems like you do have some info on some big binary options place on this pair?
  • #931,640
  • Oct 26, 2014 7:52am Oct 26, 2014 7:52am
Quoting yunyoungro
hey guys. is stress test result ok???
ECB’s Constancio says bank review results are credible

Bank capital raising to date adds to tests success Bank credit restrictions won't hamper recovery 13 failed banks still to apply structural downsize or come up with plans to cover shortfall

it seems to be positive for EURO, it may be gap up on monday, but i dont know how much
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