Can you choose what leverage to use before each trade?

[xandman]

I haven't heard of a broker that does it by trade. Oanda may allow it by sub-account but not at the granular level that you want.

It would be much simpler to earmark more capital to the trade, visualize the move in play and position size accordingly. These are all dimensional factors that should be in your head anyway. The calculations are elementary. But, you will have to periodically re-adjust.

The biggest factor you should be thinking about is the magnitude of the move for the given time frame...just like options.

 

[Tradex]

I haven't heard of a broker that does it by trade

Call your Forex or Futures broker and tell him you want 4 to 1 leverage on the next trade.
He will probably laugh hysterically because the request does not make any sense.
(Don't try this at home folks, this is just an example.)

You can however ask him to lower your leverage permanently (from 100 to 1 to 25 to 1 for instance).

It is an unusual request but it is doable, if you have a good relationship with your broker (just keep in mind that now you have to pay 4 times more margin money per contract/lot).

 

[jys78]

Hi guys,

Is it possible to customize what leverage you want to use before each making each trade? For instance, for one trade, let's say I want to use 2:1 leverage, but for another I want to use 4:1.

Or can you only choose the leverage for your entire account?

Thanks

Yes.

 

[xandman]

Call your Forex or Futures broker and tell him you want 4 to 1 leverage on the next trade.
He will probably laugh hysterically because the request does not make any sense.
(Don't try this at home folks, this is just an example.)

You can however ask him to lower your leverage permanently (from 100 to 1 to 25 to 1 for instance).

It is an unusual request but it is doable, if you have a good relationship with your broker (just keep in mind that now you have to pay 4 times more margin money per contract/lot).

I think you are the only one who can't accept the concept that you earmark capital to a trade to lower your effective leverage. I have nothing more to discuss.

 

[maxinger]

Hi guys,

Is it possible to customize what leverage you want to use before each making each trade? For instance, for one trade, let's say I want to use 2:1 leverage, but for another I want to use 4:1.

Or can you only choose the leverage for your entire account?

Thanks

Simply adjust the quantity to suit your personality, your trade plan
and that particular product

 

[Tradex]

leverage

Leverage is a loan given by your broker, period. It has a fixed value and you cannot "lower" it no matter how you trade.

This is the true definition of leverage, a loan that will allow you to magnify your winnings, if your trade is profitable.

If your broker gives you 100 to 1 leverage then you are using a 100 to 1 leverage, even if you allocate 0.00000001% of your capital to your position.

Leverage has absolutely nothing to do with your capital or the size of your trades.

 

[xandman]

Leverage is a loan given by your broker, period. It has a fixed value and you cannot "lower" it no matter how you trade.

This is the true definition of leverage, a loan that will allow you to magnify your winnings, if your trade is profitable.

If your broker gives you 100 to 1 leverage then you are using a 100 to 1 leverage, even if you allocate 0.00000001% of your capital to your position.

Leverage has absolutely nothing to do with your capital or the size of your trades.

Bah!, Fabozzi!

 

[savoir]

Leverage is a loan given by your broker, period. It has a fixed value and you cannot "lower" it no matter how you trade.

This is the true definition of leverage, a loan that will allow you to magnify your winnings, if your trade is profitable.

If your broker gives you 100 to 1 leverage then you are using a 100 to 1 leverage, even if you allocate 0.00000001% of your capital to your position.

Leverage has absolutely nothing to do with your capital or the size of your trades.

Ever hear of a performance bond? Clearly, leverage is not always a loan from the broker.

 

[maxinger]

Leverage is a loan given by your broker, period. It has a fixed value and you cannot "lower" it no matter how you trade.

This is the true definition of leverage, a loan that will allow you to magnify your winnings, if your trade is profitable.

If your broker gives you 100 to 1 leverage then you are using a 100 to 1 leverage, even if you allocate 0.00000001% of your capital to your position.

Leverage has absolutely nothing to do with your capital or the size of your trades.

I know it sounds ridiculous;

how nice if I can increase the leverage.

 

[Same Lazy Element]

I always want to scream when I hear traders talking about "too much" leverage.

People, you CANNOT change leverage, no matter how hard you try. Leverage is a loan given by your broker so that you can buy more stuff with less money, end of story.

If you can buy a $100 000 house with $10K down then your bank is giving you 10 to 1 leverage. Same thing when you broker allows you to buy $100K worth of Euros with only $1,000, the leverage is 100 to 1.

Again, leverage does not change, it has a fixed value.

(a) Leverage is the ratio of your GMV to your capital at risk. The upper bound is dictated by your broker, clearing firm or risk capital (depending on where you are). The lower bound is zero, assuming you are carrying zero risk. Anything in between is up to you.

(b) Of course, you can change leverage by changing the amount of capital. For example, someone who has 169k in his account and carries one spoo has no leverage. Someone who has 85k and one spoo is leverage 1:2 etc. The fact that E-mini have much higher inherent leverage is irrelevant.

(c) Leverage and risk are related, but not identical. For example, a boxed position could consume a lot of leverage while carrying very little risk.

(e) Sources of leverage can vary from broker (in form of a margin) to your clearing house (again, by setting margin on specific products) to your prop firm (borrowing money from outside) etc. Sometimes you get to mix them - e.g. someone can be trading spreads on the exchange (highly leveraged) while using his first-loss provider for part of the margin.

(f) Go ahead, scream all you want.