baddog4x
Dishonorably Discharged
- Messages
- 46
the leverage setting of my terminal does not change my risk level. The leverage setting of my terminal simply determines how much margin is required to open a trade.
for example, at my regulated broker which allows a max of 50:1, a 0.01 lot trade of eurusd requires about $22.50 of margin... but the exact same trade at 500:1 will only require 1/10th of the margin to open or $2.25 and the exact same trade at 1000:1 would only require half of that or $1.12
no matter what the leverage setting of my terminal, 0.01 lots of eurusd will earn me a profit or loss of ten cents per pip($0.10 per 0.0001).
with lower leverage, i am always going to be closer to a margin call because most brokers will begin margin calling my trades when my equity is <= margin used.
with higher leverage, i have the ability to open more trades which means more profit/loss which is the equivalent of driving a sports car with lots of horsepower.... dont hit the gas too hard.
higher leverage does not create more risk... the placing of trades creates risk.
technically, risk begins when i deposit into my account and ends when i successfully withdraw all funds.
for example, at my regulated broker which allows a max of 50:1, a 0.01 lot trade of eurusd requires about $22.50 of margin... but the exact same trade at 500:1 will only require 1/10th of the margin to open or $2.25 and the exact same trade at 1000:1 would only require half of that or $1.12
no matter what the leverage setting of my terminal, 0.01 lots of eurusd will earn me a profit or loss of ten cents per pip($0.10 per 0.0001).
with lower leverage, i am always going to be closer to a margin call because most brokers will begin margin calling my trades when my equity is <= margin used.
with higher leverage, i have the ability to open more trades which means more profit/loss which is the equivalent of driving a sports car with lots of horsepower.... dont hit the gas too hard.
higher leverage does not create more risk... the placing of trades creates risk.
technically, risk begins when i deposit into my account and ends when i successfully withdraw all funds.