high leverage high risk ?

Discussion in 'General Forex Discussion' started by Mark Fahad, Oct 19, 2016.

  1. Mark Fahad

    Mark Fahad Trader

    33
    2
    14
    Without proper risk management by and large traders fall a great loss by taking high leverage in particularly the newcomers. But, according to my trading experience, I don’t consider high leverage at any risk, if there is any risk, it is completely with non-sense planning and zero risk management policy, nothing to do with high leverage. So, for avoiding loss, before trading with high leverage we have to know how to manage risk.
     
  2. Kizmi Khan

    Kizmi Khan Trader

    11
    2
    14
    If a trader chooses a broker with high leverage... such as 200:1... it would be impossible for him to use the maximum available leverage because he would be too close to a margin call.

    It would also be foolish to use such as 50:1 leverage per trade. For instance, if he were trading 50 mini lots with his $10,000, he would be in a situation whereby every pip would equal $50.

    Since the forex market vacillates up and down by 100 pips, being on the wrong side of the market could cost him $5000 (100X$50=$5000), or 50% of his $10,000 account, in just one trade!

    I like 1:100 more.
     
  3. Alexfx79

    Alexfx79 Active Trader

    376
    20
    39
    I just came from the theme where people said about a broker with 1:3000 leverage. Don't know if there are traders who will use it (I'm sure they are, but they are all newbies probably), but it's too risky. Of course the phrase in the theme is right. 1:500 is normal as for me
     
  4. BagIt

    BagIt Newbie

    26
    1
    4
    1:500 is still considered high for a new trader, its advisable to for for 1:100 or 1:200 as a newbie
     
  5. Alexfx79

    Alexfx79 Active Trader

    376
    20
    39
    Yeah, I won't even say about more!
    The problem is that many brokers make ads with huge leverages and young traders think as maximalists "All or nothing" and choose the biggest ones.
     
  6. BagIt

    BagIt Newbie

    26
    1
    4
    That's it ,for traders with experience 1:500 is a good advantage and even for them some are not even using that high but newbies are rather deduced into it.If you can use it with no problem then fine
     
  7. Hafizmd

    Hafizmd Active Trader

    77
    5
    29
    I think even 500x 1000x is too much sometimes :)
    But if you have enough capital and strong money management and risk management... why not ?
     
  8. daniele roos

    daniele roos Newbie

    14
    1
    4
    I would suggest not starting trading with big leverage.
    Leverage can be good or bad in the market. Basically leverage helps you boost your trade returns. However, it can also bring huge losses in case of a wrong trade. Traders with the high leverage like 1:500X gets a bigger opportunity to earn profits. But during the bad trade phase, this big leverage works against us and eats up a significant part of margin. Many believe that leverage can put a trader under higher risk as the magnitude of potential losses increases on account of leverage.
     
  9. f4forex

    f4forex Active Trader

    231
    1
    29
    Those who are new to forex trading market might not be aware of the market conditions so they should keep the leverage low in start in order to avoid losses as high leverage can end claiming higher damages to them, so be very careful with it !!
     
  10. fxapex

    fxapex Active Trader

    258
    6
    29
    HIgh leverages are good but how to utilise it is to be understood first, thats why only experienced trader should go for it.
     
  11. nikita sharma

    nikita sharma Trader

    46
    0
    7
    I would suggest not starting trading with big leverage increases risk factor an hence untill and unless you are an expert better work with small leverages.
     
  12. Ary Barroso

    Ary Barroso Active Trader

    558
    14
    29
    Basically, traders need to use the leverage facility based on their trading plan & strategy’s requirement! Without any plan using the high trading leverage looks like meaningless to me.
     
  13. Think Pad

    Think Pad Trader

    10
    0
    11
    Why Leverage is Incorrectly Considered Risky. Leverage is commonly believed to be high risk because it supposedly magnifies the potential profit or loss that a trade can make (e.g. a trade that can be entered using $1,000 of trading capital, but has the potential to lose $10,000 of trading capital)
     
  14. J_C_Anderson

    J_C_Anderson Trader

    55
    4
    19
    The leverage could be also used to reduce the amount needed to open a position. This means that the trader just use less money to open the same position he would open without such leverage, and this is not about increasing the position size.
     
    Enivid likes this.
  15. Mary Z

    Mary Z Trader

    16
    1
    14
    Honestly, We work client based. We always say use the leverage your account can hold. Don't take a higher leverage than your balance can work with. The market is a risky place, taking higher leverage than your balance is able to hold can risk losing your whole account.
     
  16. Kevinesp8

    Kevinesp8 Trader

    4
    1
    14
    high leverage = high risk and also big profit or loss:) I have account with 1:500
     
    Mary Z likes this.
  17. Mary Z

    Mary Z Trader

    16
    1
    14
    I agree. But some people are misfortunate
     
  18. Ary Barroso

    Ary Barroso Active Trader

    558
    14
    29
    1:500? So, till now you are trading with an aggressive trading leverage! Anything more than 1:100 is not possible to me.
     
  19. Dictorsto

    Dictorsto Newbie

    18
    1
    4
    Leverage will help us to plan our money management.We can manage risk in each position. I always trade with leverage 100 of my leverage. Manage ourselves and control our risks.
     

Share This Page