Leverage

[ishan agarwal]

Leverage is often expressed as a ratio or percentage, known as the leverage ratio or margin requirement. For example, a leverage ratio of 2:1 means that an investor can control an investment worth twice their own capital. Higher leverage ratios, such as 3:1 or 5:1, allow investors to control even larger positions relative to their capital.

It's important to note that while leverage has the potential for higher returns, it also carries significant risks. If the market moves unfavorably, losses can exceed the initial investment, resulting in substantial financial losses. Therefore, it is crucial to have a clear understanding of the risks involved and to use leverage judiciously and responsibly.

 

[Aldavidov]

Depending on your risk appetite Id say 1;500 anything below that is a waste of time for a trader like me

 

[Purecaster]

For three years I understood that 1:500 is the most optimal leverage size for me. I even tried 1:2000 but it’s an insane thing. I don’t recommend it.

 

[Felhamand]

Earlier I was used to trading with a leverage size 1:1000. It was always scary for me to try a twice bigger leverage. Now I started to trade with 1:500 and hope to move to 1:300 and stick with it. It’s pointless for me to decrease leverage anymore.

 

[Buzanara]

The appropriate amount of leverage to use in forex trading depends on your individual trading strategy, risk tolerance, and experience. While leverage can amplify potential profits, it also increases the risk of loss, so it's important to use it judiciously.

Exactly, buddy! Some traders still believe that high leverage applied to positions is the only way to multiply profits faster. Still, they aren't aware of risk management and actually that it's the main problem.
As you have noted, the matter is to count risks as well, even though potential profits can obscure your mind. Otherwise, none but a sadness after losses is guaranteed.

 

[CallahanSinclair]

How and why is higher leverage better ?

High leverage in my opinion , is an opportunity and promotion that I can decide based on your research and risk management . I sometimes employ high leverage and turn a good profit. I also search for brokers with high leverage as well.

 

[bigdolly]

I tried once 1:1000 and it was crazy, very painful lesson. Lost my deposit same day. Will never repeat again.