One of the biggest reasons why the forex market is exciting and accessible to small retail traders is because of the industry’s high leverage options. Leverage gives a trader the ability to increase the potential return on an investment but also it increases the potential risk.
Do you prefer trading with high leverage?
- Thread starter Rambo35
- Start date
- Watchers 32
Using leverage has a great advantage when the market moves in your favor but its a double edge sword and carries a lot of risk when you trade with high leverage and the market turn against you. And so it is important to understand the risk of leverage so as not to overleverage your position to prevent loss of investment.
Many traders are using the 1:500 leverage offered by Profiforex even when they have a deposit of more than $1000. This goes to show that most traders love using leverage because it increases their pip value. This could also be bad when you lose since it is same pip value. However, new traders are not advised to use high leverage since they are likely to lose during their first month or year of trading.
Traders especially new traders should be careful of this leverage of a thing because is like a two edged sword, but personally I love to stick with a leverage of 1:200, though the broker am using Profiforex offers a high leverage of 1:500, also they have a fast payment processor, where you get paid fast for every withdrawal you make through either your credit card account, your skrill account, or money bookers with 24 hours
I used to 1:500 leverage but not for over 1000 usd intitial deposit, when go higher said 5000 usd, I'll used 1:200 leverage. i open and account for amount 1000 usd with armada markets, and use 1:500, got bonus deposit also which means an extra margin level for my trading account. low leverage is more like a stealth stop loss level for your order, low leverage restrict your active trade (by lost size), as the lower it is the higher margin requirement for each trade.Money Management is key in this so you need to define your risk & calculate the correct position size for your stop-loss.
One of the biggest reasons why the Forex market is exciting and accessible to small retail traders is because of the industry’s high leverage options. Leverage gives a trader the ability to increase the potential return on an investment but also it increases the potential risk.
The highest leverage I have used is 1:200 and that's very rarely. The slightest market movement against your positon can bloq your account almost instantly. So use the leverage wisely, or make sure that your broker provides separate leverage for forex, stocks, futures and so on.
I usually use high Leverage~ something ranging from 1:100-1:500... Leverage is an important factor in fx without which we can't make the proper trades accordingly to our deposit level. So for me, I prefer high over the low one.
I fully agree with Joe, 1:20 is the maximum which is needed for responsible trader.
Not at this point in time for me. Even though it is beneficial, I preferred low leverage for now. Too risky especially when the percentage of winning is less than losing.
In another word, we can say "do you prefer trading large volume?", using leverage = higher traded volume (fixed fund). I am not a scalper and I aim to get small profit but safer (money management).
Similar threads
