What leverage you use?

[isd]

I think well, so is about how to have a way of profits and trade combient hope how can resist if we your money and lose more than this, you can recommend what you should use using a 1:600 ​​leverage that can not be

[joinmmm.in]

I understand now that novice traders come into forex trading thinking they will make millions because they were being enticed by clever marketing schemes from their chosen broker that allows them to use 100:1 leverage, or even 200: or 500:1 leverage, and what often happens is they go in and lose big time.

I now know that winning Forex traders use risk management, and choose a level of leverage that's nothing near as high as even 100:1 or even 50:1 like the brokers offer.

Only amateur traders think in terms of leverage. Experienced traders and certainly professionals think in terms of risk. A decent risk limit for a professional FX trader would be something like a 95% daily VaR limit of 3% of the capital committed to the trader. The VaR limits might change depending on how the trader has been doing recently. In particular, losing traders get their VaR limits reduced so that they don't blow themselves up trying to get back to even if I am managing their risk.

In most cases leverage isn't clear as they are trading off a pile of cash in a prime brokerage account and as long as there is sufficient margin for the trade there is not an issue. Using leverage as some proxy for risk is just dumb. Levering up 30:1 on the Eurodollar rate 2-years out is not a very risky trade. Levering up 4:1 on a natural gas trade would be a very risky trade.

Forex dealers can set their own minimum account sizes, so you will have to ask the dealer how much money you must put up to begin trading.

Most dealers will also require you to have a certain amount of money in your account for each transaction. This security deposit, sometimes called margin, is a percentage of the transaction value and may be different for different currencies. Keep in mind that a security deposit acts as a performance bond and is not a down payment or partial payment for the transaction.

Let�s use an example of a dealer requiring a 1% security deposit. The formula for calculating the security deposit is:

The current price of the base currency X transaction size X security deposit % = security deposit requirement given in quote currency

Looking at the Euro example we used earlier, multiply the current price of the base currency ($1.2178) times the transaction size of 100,000 times 1%. Your security deposit would be $1,217.80.

$1.2178 X 100,000 X .01 = $1,217.80

Security deposits allow customers to control transactions with a value many times larger than the funds in their accounts. In the previous example, $1,217.80 would control $121,780 worth of Euros.

This ability to control a large amount of one currency using a very small percentage of its value is called leverage. In our example, the leverage is 100:1 because the security deposit controls Euros worth 100 times the amount of the deposit.

Since leverage allows you to control large amounts of currency for a very small amount, it magnifies the percentage amount of your profits and losses. A profit or loss of $1,217.80 on the euro transaction is 1% of the full price but is 100% of the 1% security deposit.

The higher the leverage, the more likely you are to lose your entire investment if exchange rates go down when you expect them to go up or go up when you expect them to go down. Leverage of 100:1 means that you will lose your security deposit when the currency loses or gains 1% of its value, and you will lose more than your security deposit if the currency loses or gains more than 1% of its value. If you want to keep the position open, you may have to deposit additional funds to maintain a 1% security deposit.

For example, assume you buy or sell a contract worth $100,000 and it moves against you by $2,000. No matter how much money you put up, your dollar loss will always be the same� $2,000�but the percentage loss varies with the amount of leverage. At 100:4 leverage, you will have lost half of your investment. At 100:2 leverage, you will have lost your entire investment. And at 100:1 leverage, you will have lost twice your investment and owe the dealer $1,000.

Notional value = $100,000
Loss = $2,000

Original Investment Leverage Remaining Funds Loss
$4,000 100:4 $2,000 50%
$2,000 100:2 $0 100%
$1,000 100:1 -$1,000 200%

You should check your Account Agreement with the dealer to see if the Agreement limits your losses. Some dealers guarantee that you will not lose more than you invest, which includes both the initial deposit and any subsequent deposits to keep the position open. Other dealers may charge you for losses that are greater than your investment.

Your Account Agreement with your dealer is crucial. Just as you wouldn�t consider buying a house or a car without carefully reading and understanding the terms of the sale, neither should you establish a forex account without first reading and understanding the Account Agreement and all other documents supplied by your dealer. You should know your rights and responsibilities, as well as the firm�s obligations before you enter into any forex transaction.

For example, if you are not willing or able to pay the full price and take delivery of the currency, make sure the Agreement gives you the right to enter into an offsetting transaction with the dealer. In other words, the Agreement should require the dealer to buy back any currencies you previously bought or to sell you any currencies you previously sold. Otherwise, you may be responsible for paying the value of the entire forex contract and accepting the foreign currency.

A number of firms are presently offering options on off-exchange foreign currency contracts. Buying and selling forex options present additional risks, many of which are similar to those inherent in buying options on exchange-traded futures contracts. NFA publishes a brochure called �Buying Options on Futures Contracts: A Guide to Their Uses and Risks� which discusses the mechanics and risks of options trading. The brochure can be downloaded from NFA�s Web site.

Most exchange-traded options can be exercised at any time before they expire. These are called American-style options. Many forex options are European-style options, which can be exercised only on or near the expiration date. In other words, you can�t take advantage of a favorable price move that occurs before the expiration date unless you can offset your position. You should understand which type of option you are purchasing.

[dasar]

what-leverage-you-use i just onli use 1 : 1000 everage cause off my small capitall i f i ahave alots of capital i think i can use the smal levarege to money management the sistem of money

[sabun]

I always use 1:1000 leverage in my accounts. i think is the best leverage can mak ethe huge profit .. that i see that there so many kind of riskyy of leverage

[fst56f]

I think it's good but I can not recommend what you should use you because it's about how we had money and your method of trading.this is not problem for the trader what setting for leverage as long as they can trade with well, everything is fine and then leverage is not the loses factor

[pisang]

i think with instaforex and i think you too the leverage with instaforex is: 1:2 , 1:10, 1:20, 1:50, 1:66, 1:100, 1:150, 1:200, 1:300, 1:400, 1:600, 1:1000... u can use the leverage that u want that make as describe the type of ur trade

[awaiskik222]

mery khyal se ap ko 1:1000 ki leaverage use karni chahye so i think learn the forex and i think this forex trading is one kind of business and one kind of job.because it is so much enjoyable trading business for us.i love this forex trading business so much you can earn in many ways from forex is suitable industry in this virtual online process

[sudah]

i use the leverage 1:1000 I think it's good but I can not recommend what you should use you .. there the high leverage.. n u can earning the maximum profit with the capital .. has a higher losst ttarde riskyy

[Azharawan]

I use the leverage 1:600 i think it's good but i can not recommend what you should use you because if you use high leverage then margin value is increased.

[mimon95]

i use 1000 leverage. i had used this because i had made a strategy of taking more risk so that i can earn more profit also. so i had choose this.