what is your leverage when you trade ?

homa

Banned
Messages
6
hey guys ,

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

Pharaoh

Colonel
Messages
19,717
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.
 

Pharaoh

Colonel
Messages
19,717
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.
 

Joh

Sergeant Major
Messages
963
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.
 

viewpoint

Recruit
Messages
4
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.
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
 

Pharaoh

Colonel
Messages
19,717
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.
 

viewpoint

Recruit
Messages
4
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.
 

Pharaoh

Colonel
Messages
19,717
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.
 

viewpoint

Recruit
Messages
4
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.
Wise words that too few care to follow.
 
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