How Much Leverage Do You Use To Trade Forex?

[Xela]

why currently many broker from also offer higher leverage like as 1:1000 and stil there are higher leverage 1:2000, this is very high leverage as I know

Because they have a very direct incentive for their clients to lose: they're holding the other sides of their own clients' trades!

The conversation is confused and confusing because it seems that you don't appreciate the difference between a genuine broker and a counterparty market-maker.

 

[Q3D]

Because they have a very direct incentive for their clients to lose: they're holding the other sides of their own clients' trades!

The conversation is confused and confusing because it seems that you don't appreciate the difference between a genuine broker and a counterparty market-maker.

I believe Interactive Brokers has a propietary firm that could do the same to overleveraged traders. Day trading is inherently a dangerous endeavour and the majority of the blame lies on those who engage in human discourse (trading teachers, not brokers) to hoodwink others into participating in this self-destructive path of greed and failure.

 

[orangelam]

Sorry i have a question about leverage discussed here. I mixed about two concept

1) say for a crude oil futures price is 40, each contract is for 1000 barrel with tick size 10. And margin is 4000. So contract value is 40*1000*10=400000. Hence leverage is 400000/4000=100

2) if my account value is 8000 and broker eager to offer me 100 times buying power, so i can have 800000 capital. Then i can buy max 800000/4000=200 contracts. So this 100 times buying power is called "leverage"?


May i know am i correct for both leverages concept? and which one is discussing here?

Thanks

 

[julie_flower]

Usually I will choose 1:500, this is medium leverage I think, but we can use leverage 1:1000 if just want to trying use these leverage, and this will useful for trader that will use extreme strategy like as martingale trading system

you are risky trader, such a high leverage to use.

 

[radex78]

you are risky trader, such a high leverage to use.

Yes, indeed still sometime high leverage leading to become over trade of take highest risk, but because usually only start with capital in small number, so although loss it still in early preparation, not too much regret

 

[Stockmalaza]

I make use of the full 1:1000 leverage my broker offers and I personally don't think am over doing it. As that's what am comfortable with.

 

[nonlinear5]

1) say for a crude oil futures price is 40, each contract is for 1000 barrel with tick size 10. And margin is 4000. So contract value is 40*1000*10=400000. Hence leverage is 400000/4000=100

The tick size is irrelevant to the concept of leverage. In your example, the contract value is
40 * 1000 = 40,000
and the maximum leverage allowed by broker for that particular instrument is
40,000 / 4,000 = 10

To generalize,
Maximum leverage = contract value / contract margin
Your leverage = position value / account value

For example, if your account size is $20,000, and you buy 2 crude oil (ticker CL) contracts at $40, then your leverage is
(2 * 40 * 1000) / 20,000 = 4

 

[hoa_elite]

I use leverage 1:50 since I often go with moderate capital,
I used small account with high leverage before, and it seemed to lose money very easily.
if I go with big deposit, it's even more risky. So I found 1:50 is a suitable leverage, to lose and earn money as well

 

[radex78]

I use leverage 1:50 since I often go with moderate capital,
I used small account with high leverage before, and it seemed to lose money very easily.
if I go with big deposit, it's even more risky. So I found 1:50 is a suitable leverage, to lose and earn money as well

Some trader said if use high leverage indeed will hard to maintain account, but some another said if high leverage as long as keep strict with risk management, this still not big deal

 

[hoa_elite]

Some trader said if use high leverage indeed will hard to maintain account, but some another said if high leverage as long as keep strict with risk management, this still not big deal

so what about you? what leverage do you offen trade