High Leverage vs Low Leverage

This thread is created to discuss the problem of leverage trading and to highlight some of the very important points regarding this.

I know there must be plenty of threads like this but I want to add it as sub-thread to some of the Robots Lab EAs we will be testing in the future

The concerns are valid but I would like to discuss it here always from the systems thread as I have seen too many times how threads lose their focus or purpose with many people starting to debate things that the thread was nor designed for.

I am still updating this first post but feel free to post

Rooi

High leverage, low leverage. Who cares if you base your stops on a percentage of your money you are willing to losse. Useless discussion.

Thank you for your time and contributing to this useless discussion

Rooi

If you are a Day trader with small targets and are highly profitable with a great win rate you should use high leverage of at least 50:1.

Small targets, high win rate goes with the territory of high leverage, but did you say 50:1 is high leverage, what would you say of EXNESS 2000:1 offering?

2000:1 is for gamblers. They must trade with margins of 5-10 pips b4 their accounts are wiped out.

high leverage can work as you can see in my demo system but it only take one trade to blow the account.

I used a high leverage on my demo account, but since I've jumped in for real I prefer a low leverage, because I can't afford to lose all my money.

Using high or low leverages will depend on your experience and how risky you want your trading to be. Low leverages are the most recommended for beginners and those who wish to keep their accounts safer.

Old thread tho,but why would you term some one discussion as useless? He might be in need of different answers on this .

I'wd go with a low leverage of 1:200. That is okay for me .But regardless the leverage you use either high or low you should take into consideration a very good money management .

High Leverage vs Low Leverage:

Excellent Timing vs Dreadfull Timing.

1:200 low?

I always keep the account balance in my broker account as low as possible and max the leverage.
Unless you gain interest on monies in your broker account why risk having money sitting?
There always a chance you broker could go belly up. If you need more funds just wire it.

Nothing to discuss really. If trader doesn't know to trade s/he will lose money no matter what.....It is just question of time.

End of discussion.

Leverage doent affect the pips value .
so a better question is " micro lots or standard lots" ?

Keen observers of the financial markets and dedicated readers of the financial press over time would be forgiven for being somewhat confused by the oscillating views on financial “leverage” in the perception of market participants. Leverage is the double edge sword, new traders in forex should not play with high leverage leading by their greed. Even professional traders also use very wisely when it’s about using leverage. Depending on the sector, context, time period, and perspective, perceptions of financial leverage can change dramatically.

In my opinion leverage is the most powerful thing in this world which enable us to grow faster with the help of support lent by others. So is the case with forex trading and leverage in forex is actually the support given by the brokers through which many of us makes a lot of money if used appropriately, many on the other hands looses money too. Some brokers like hotforex offers 1:1000 on micro and 1:400 on the regular accounts however there are many crazy offers like 1:3000 which is pretty unrealistic in my opinion and the new traders should keep the leverage low in start because high leverage may claim higher damages as well.

It is more appropriate to use high leverage in demo account, and after gathering the experience about leverage we have to move in live with more carefully. Because high leverage always contains high risk.

I would like to input my opinion about leverage.

Leverage is good as it frees up the rest of your capital to trade/invest in other assets/markets. Say you want to take long 10k worth of eurusd, but you only have 10k capital. It wouldn't be very smart to use all your capital just to take up one position. With leverage, you only need to put up a fraction of your capital as margin to take a 10k position. Thus freeing up your capital to be put to better use.

A consequence of this larger position is the amplified gains and losses you will experience. Im sure you have heard alot about leverage being a double edge sword.

IMO, the negativity surrounding leverage is that traders tend to use high leverage with no real edge or "blindly betting" in the markets, even with no leverage, these people will go bust eventually, even without leverage. Leverage just quicken the process.

I honestly feel that when used responsibly, leverage is a VERY powerful tool. The amount of leverage to use depends on your risk appetite, and your trading edge (which cant objectively be measured anyways).

In the past, many brokers were able to offer significant leverage ratios as high as 400:1. This means, that with only a $250 deposit, a trader could control roughly $100,000 in currency on the global forex markets. However, financial regulations in 2010 limited the leverage ratio that brokers could offer to U.S.-based traders to 50:1. This means that with the same $250 deposit, traders can control $12,500 in currency. Forex traders should choose the level of leverage that makes them most comfortable.