overleveraging

Ara

Active Trader
Apr 24, 2023
131
25
39
34
During which market conditions or scenarios is overleveraging more common? How can traders protect themselves during these times?
 

M.Joey

Banned
Sep 3, 2023
5
1
4
27
During which market conditions or scenarios is overleveraging more common? How can traders protect themselves during these times?
It’s always better to avoid overleveraging but if you find any strong support or resistance level from where the market is more likely to return, you can use overleverage in that case but the order must be tied with higher stop loss.
 
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Reactions: Ara

Ara

Active Trader
Apr 24, 2023
131
25
39
34
What do you mean by 'overleveraging'?
Using a high leverage.
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It’s always better to avoid overleveraging but if you find any strong support or resistance level from where the market is more likely to return, you can use overleverage in that case but the order must be tied with higher stop loss.
It's all about finding that balance between risk and opportunity.
 

Chadpowell

Trader
Apr 8, 2023
87
21
24
New York
I guess you have to own an answer to this question while you are building your trading system. You need to know your risk management, appropriate leverage and things like that..
 

Ara

Active Trader
Apr 24, 2023
131
25
39
34
Then your question doesn't make much sense. Why would it be more common during some market conditions? Why would someone need to protect themselves from it?
It does. Maybe you want to use a high leverage in some conditions but at the same time, you want to manage it.
 

hayseed

Master Trader
Jul 27, 2010
1,073
266
149
usa
During which market conditions or scenarios is overleveraging more common? How can traders protect themselves during these times?
//----

here's a scenario ....


once, high leverage seemed important to me and in reality my control over it was low.....

now, my control over leverage is high and my need for leverage is low.....

so maybe, it has nothing to do with market conditions.....

we might over leverage when we have no control and the only protection might be gaining control......h
 

BGoodwin

Trader
Nov 27, 2023
3
0
6
34
Overleveraging is more common in bullish and volatile markets. Traders can protect themselves by setting strict risk management rules, using stop-loss orders, and avoiding excessive leverage.
 
Dec 14, 2023
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42
If you don't invest all of what you have in one pair or asset, basically avoid one dimensional trading and spread your investments it is almost impossible to "overleverage" yourself and your trades.
 

CallahanSinclair

Active Trader
May 13, 2023
125
16
34
40
During which market conditions or scenarios is overleveraging more common? How can traders protect themselves during these times?
I think during a high volatile market, and I think a good way to protect their money is using stop-loss.
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I think during a high volatile market, and I think a good way to protect their money is using stop-loss.