As far as i am concerned, i like to use a leverage that is the maximum with my trading brokers, it is not that i use all the leverage in my position, i keeps them foir in case.
Printable View
As far as i am concerned, i like to use a leverage that is the maximum with my trading brokers, it is not that i use all the leverage in my position, i keeps them foir in case.
the fact is if you will use small leverage you cant buy big lots with small capital.and your earnings and losings will be limited.if you have a big capital using small leverage can let you profit with lower risk.but if you own small capital you will really need high leverage.even it is risky but it is only the way to make some good profit from a small capital.
i think it is best to use 1:400 for all traders.if we use high leverage like 1:1000 then we need to maintain our lot size to .1 or .2 .however if we are strong in forex trading we can use whatever leverage that suits to them.
The more you use leverage the more your capital risky; on the contrary the more leverage the more profit. So high leverage using has both advantage and disadvantage. I think since a beginner has no experience on forex he should use only 1:100 leverage. It is useful for both reward and risk in case of beginner.
I can say that the biggest advantages of the leverage is that it enhances the trading ability of any traders specilly the newbies and specially the traders who have less investments or less capitals and good skills can use the leverages to make more profits really !!
imo, leverage is like double-edged sword.. on 1 side, it give us advantage to take a position larger than our capital can provide.. but ont the other side, if we have a wrong position, the margin will be drained faster because the position we take will eat larger margin..
the fact is if you will use small leverage you cant buy big lots with small capital.and your earnings and losings will be limited.if you have a big capital using small leverage can let you profit with lower risk.but if you own small capital you will really need high leverage.even it is risky but it is only the way to make some good profit from a small capital.
There are many benefits of leverage. You can use leverage in various way. You can use leverage as for your stops, You can trade big lots with small balance by leverage.