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what is your leverage when you trade ?

Discussion in 'General Forex Talk' started by homa, Oct 3, 2012.

  1. homa

    homa Banned

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    hey guys ,

    what is your leverage when you trade ? it is interesting for me to know about that ? :cool:
     
  2. Pharaoh

    Pharaoh Colonel

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    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.
     
  3. duderex

    duderex Private

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    my leverage is 1:500 even though some broker offer different leverage like 1:1000
     
  4. Pharaoh

    Pharaoh Colonel

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    Just remember, leverage is like a gas pedal in your car. You aren't obligated to use all that leverage just like you aren't obligated to make your car go as fast as possible. Like driving your car too fast, if you use too much leverage, you risk a serious accident.
     
  5. Joh

    Joh Sergeant Major

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    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.
     
  6. viewpoint

    viewpoint Recruit

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    Leverage is the multiplier you apply to your capital so if you have a trading capital of 2000 and use 1/10 leverage than you can't trade more than 0.2 lots. Your stop loss has no effect regarding leverage
     
  7. Pharaoh

    Pharaoh Colonel

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    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.
     
  8. viewpoint

    viewpoint Recruit

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    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.
     
  9. Pharaoh

    Pharaoh Colonel

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    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.
     
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  10. viewpoint

    viewpoint Recruit

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    Wise words that too few care to follow.
     

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