Forex Trading Forum » FOREX DISCUSSION » General Trading Discussion

1. 

   Newbie2Fx
   Member

   Is there a certain leverage I should start with as a beginner. I dont understand how it works to much?

   Posted 1 year ago #
2. 

   ZTrader_Fx
   Fx Trader Moderator

   As a beginning Forex trader, I would recommend to use the least amount of leverage you can. It is much more important to learn and understand the market than it is to wipe out your account using too much leverage. Some brokers tout leverage as high as 400 to 1, for beginner it is totally unnecessary and can lead to quick losses. There are brokers out there that offer leverage levels around 10 to 1 and, if I am remembering correctly, some brokers do have 1 to 1 and 5 to 1 levels. It is always a good idea to test any changes or experiments in your demo account or with a really small amount of capital before you move on to your live account.

   Here are some more articles on leverage that may be of help:

   Forex Leverage: A Double-Edged Sword

   About Leverage on Forex

   How To Prosper At Forex Trading - Leverage & The K-Factor

   Posted 1 year ago #
3. 

   johan
   Member

   Margin requirements and interest vary among broker/dealers. The amount of leverage you use will depend on your broker and what you feel comfortable with. You can get leverage from a high as 1% with some brokers. This means you can control $100,000 with the investment of only $1,000. The broker sets a minimum account size also known as account margin or initial investment. Once you have deposited the required sum you will be able to trade in the forex market. The minimum security for each lot usually varies from broker to broker. While with the brokers you should be well aware of the Margin call. Suppose for any reason, if the broker thinks that your holdings are in danger and your losses are approaching your margin quite fast. He may ask you to deposit more money, or dispose your holding of the forex lots to limit your risk and his risk.
   ________________________________________________

   Foreign Exchange Trading

   Posted 1 year ago #
4. 

   KajolThappar
   Member

   As you indicated, it is not just your leverage that you need to take into account...it is also your margin level that is important.

   When I am drawn back to my technical analysis days I usually use a leverage of 40:1 unless I have a high probability setup occurring (based on pivot points and fibs). In that case I might go as high as 100:1.

   Currently the majority of my Forex activity is based on conservative hedge trades (usually hedging the EUR/USD and USD/CHF). With my hedge trades I use a leverage of 400:1 and a margin of 10%. Hedging is awesome because the position can make profit regardless if the market goes up or down. I also get paid a daily interest payment, 7 days a week.

   I have an analysis of the daily performance of 5 different hedge strategies over the past 500 days if you would like to see it. And these were all at 400:1 leverage and never anywhere near a margin call.

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   Posted 1 year ago #
5. 

   wringle
   Member

   Does anyone have any suggestions on a leverage limit?

   Many FOREX brokers allow up to 200:1 leverage. My trading strategy is to take just very small gains (3 or 4 pips at a time) and set the stop losses way out there just to avoid a total wipeout. I never trade on Fridays either and of course close out before the market closes.

   Because of the giant stop losses, I am only comfortable with around 20:1 leverage or maybe 30:1.

   In other words, with a $500 margin account balance, I would only consider buying 0.1 lots of EURUSD (10,000) at a time; 0.2 lots with $700; 0.3 lots with $1100 and so on...

   Does anyone out there use the same strategy as me and feel comfortable with higher leverage like 40:1, 50:1 or even higher?

   Posted 1 year ago #

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