Leverage risks

[forexawyyyyyy]

Actually guys , I think the leverage in forex is the big reason to lose your money

 

[Pharaoh]

Failure to control risks is the big reason to blow an account. If you are scaling into a trade during a strong trend and have each sub-position protected by trailing stops, you can work your way up to very high leverage with a very good degree of safety.

 

[Sub-zero]

There're lots of situations when beginners maximize their leverage in order to receive "huge profits". The result is quite predictable as they get a margin call very soon.

In general I wouldn't recommend a newcomer to abuse leverage, especially without any specific reasons. But reasonable using of it together with s/l can be very productive.

 

[WinFX]

Most traders using high leverage are blowing up their accounts in the course of time. Professionals are using only small leverage, maybe only 2-3. A good rule is that you should loose max. 2% per trade if it goes against you.
Using a leveage of 1:100 as offered by some brokers is suicide

 

[Pharaoh]

Risking a percent of an account is not always linked to leverage. A trader using 5:1 leverage can easily risk more than 2% of an account on a trade. A bad trade can blow an account using 1:1 leverage. Admittedly, 100:1 or above can make blowing the account much simpler for those who want to misused all that leverage.

The problem is that new traders get blinded by the idea of profits and don't stop to think that a 10 pip move against them will hurt just as badly as a 10 pip move in their favor.