Thanks to the NFA, I'm limited to 50:1. Since I trade conservatively and exercise strict risk management, I rarely use more than 10:1.
Could you spell that out. For many newbies they have not got clue what that means - so like when take a 0.10 trade my SL is ...... etc
thank y in advance.
Sl doesn't affect leverage directly. On the other hand, if you use your SL to limit the percent of your account that you risk on any one trade, leverage will be something you seldom need to worry about.
That's true. However the level of your stop loss is, or should be, determined by the market [levels] and not by the size of your account.
Yet the SL must contain your risk and therefor your leverage. So, the only remaining variable is lot size, which then has to be adjusted to complete the risk management equation. If the market determined SL puts you at too much risk with the smallest allowable trade volume, then the trade should be skipped.