Basic understanding of Leverage

[sininfinity]

Generally we the newcomers try to make money very rapidly by using high leverage and fall a great loss when trading practically without any trading plan as well risk management policy , so before trading with high leverage it is obviously important how to manage risk in forex trading.

True lol. Even after too many warnings have been made, still traders can not control their greed and try to get rich within a short period of time. That is when they fall hard and finds it difficult to recover.

 

[Nezami]

If any newbie using high leverage on demo account , usually initial capital is a big number more than 5000$ and using high leverage they can free to using even extremes strategy like as martingale system, but will better if in demo also using amount capital same with number money that will invested in real account.

 

[The trader]

1:50 is more appropriate for the beginner due to lack of experience making a good trading plan when using leverage. 1:100 leverage sometimes can causes a great trouble when market moves at random. And beginner should avoid over trading and revenge trading for reducing huge losses.

 

[sininfinity]

If any newbie using high leverage on demo account , usually initial capital is a big number more than 5000$ and using high leverage they can free to using even extremes strategy like as martingale system, but will better if in demo also using amount capital same with number money that will invested in real account.

It is not a good idea to use martingle strategy with any amount of capital. They will all end up in losses sooner or later. So better stay away from it.

 

[Faal]

The most popular leverage offered by the brokers are 1:500 and 1:1000 because, the higher the leverage, the higher margin or more trades simultaneously that we can execute. Leverage is a matter of our choice for the risks we will take whether we are good for high risks or not.

I think, 1:1000 trading leverage is really too much! Without proper trading plan, using high trading leverage would be risky! In my live account, I am comfortable with 1:100 trading leverage! It’s suitable with my trading plan.

 

[Nezami]

If you are a newbie I would suggest you to trade with small leverage, because leverage is an important financial tool which always contains risks. So, as a newcomer first of you have to acquire proper risk management policy by trading in demo account in a long time, this approach help you to see the performance how works high leverage.

 

[lioneld]

Leverage is imparted as an extent and relies upon the edge necessities constrained by your broker. For example, if your broker anticipates that you will keep up a base 2% edge in your account, this infers you ought to have no under 2% of the total estimation of an arranged trade open as trade out your account, before you can proceed with the demand. Imparted as an extent, 2% edge is equivalent to a 50:1 leverage extent (1 parceled by 50 = 0.02 or 2%). For my trading I utilize 400:1 at Lx Markets however the broker gives 500:1 leverage. I additionally make the most of their low spreads.

Hello mate; till now you are using the same ratio (1:400)? According to me, it’s an aggressive ratio! Waiting for your answer.

 

[Tom Latham]

Well; when I started my trading profession then I was confused on my success; since I had no background on Forex! By the way, I am really thankful on this community; really I have learned a lot by this forum.

 

[Eduardo Lucchese]

Keep your motivation alive all the time because you don’t know when you can profit on the market and when the loss occurs.

 

[Oscar Shumack]

Good consideration leaves traders with some better ideas over the market. So, knowledge is the king here!

 

[Gito Dinev]

Traders should use multiple strategies at a time to produce better signals. But in that case, trading knowledge is important!

 

[Nayek Pichai]

Deficiency of practical knowledge pushes a trader towards recurring losses. For practical knowledge, you have no option except trading on demo account.

 

[Bahiya Shinam]

We always try to maximize our lot size for larger return making the best use of high leverage. But in executing trades, we make mistakes that keeps us lag behind.

 

[Nayek Pichai]

Earlier in the days, Youtube wasn’t famous and there were roughly some videos available. But in 2023, you will find hundreds of trading tutorials available on Youtube.