Leverage beyond 1:100?

I think it depends on how much capital you have up.

Back when I was Assent I had 250k up and 40 million in Buying Power. 140:1, I think.

But average size is just about 10,000 to 15,000 shares per position. There are times that I would increase the size if I had enough conviction.

Point being, if you are putting up only 5k, I think you are wasting your time. You won't learn, the MOST you need is about 125k in BP with only 5k up. Just my opinion and for a newbie, I think that is too much.

I will say, I can only think of twice I maxed out my BP. LOL...
 
Quote from nyxtrader:


Point being, if you are putting up only 5k, I think you are wasting your time. You won't learn....
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What won't you learn?

If you can't trade with 5k then increasing your investment isn't going to help!
 
Quote from cabletrader:

What won't you learn?

If you can't trade with 5k then increasing your investment isn't going to help!
More...

I agree.

Lets face it, 5k isn't a lot in this market and one can blow through that in a few stupid trades. With such little capital I find that most trades are concerned with preserving their capital rather than focusing on good trades.

So with such little capital and more than 20:1 leverage, I think most traders are set up for failure.
 
Quote from nyxtrader:

I agree.

Lets face it, 5k isn't a lot in this market and one can blow through that in a few stupid trades. With such little capital I find that most trades are concerned with preserving their capital rather than focusing on good trades.

So with such little capital and more than 20:1 leverage, I think most traders are set up for failure.
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Did some of you guys miss the chapter on money and risk management by any chance?

The amount of capital you have doesn't make any difference in this context, in fact the less the better when starting out.

Preserving the capital you do have is primary though, and that shouldn't change whether you have 5k or 500k, control risk and there won't be any chance 'one can blow through that in a few stupid trades'

Really, I'm simply amazed by some of the responses, what happened to this place......
oyvey.gif
 
Quote from cabletrader:



Really, I'm simply amazed by some of the responses, what happened to this place......
oyvey.gif
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Do you think that one who does not understand what leverege does can manage his risk aproriately? That is the why many don't recommend high leverage.

You also forget that the more leverage you use the more you need to control the drawdown...unless you're a gambler.
 
I can't believe that in this environment, in which we've witnessed several yen crosses have multiple intraday moves in excess of 10-14%, that the OP is looking for > 100:1 leverage.

In this environment, one could do reasonably well at 1:1, let alone 10:1, or 20:1 at most. Anything north of that and the risk of ruin grows exceedingly high.
 
Quote from mrstocker:

Do you think that one who does not understand what leverege does can manage his risk aproriately? That is the why many don't recommend high leverage.

You also forget that the more leverage you use the more you need to control the drawdown...unless you're a gambler.
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Ok, looks like we'll have to do this the long way...

What leverage do you recommend?

And please explain how you apply your recommended mandatory low leverage to a trade, using a practical example.

Thanks
 
Quote from Trader KGB:



In this environment, one could do reasonably well at 1:1, let alone 10:1, or 20:1 at most. Anything north of that and the risk of ruin grows exceedingly high.
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Why? Please give a practical example of a trade.

Thanks
 
Quote from cabletrader:

Why? Please give a practical example of a trade.

Thanks
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It depends upon timeframe, risk/reward parameters (stop distance), etc. Obviously it's not the same variables if one is scalping vs trading daily ranges. You trade and know all of this already, why do you need examples? :)
 
Quote from Trader KGB:

It depends upon timeframe, risk/reward parameters (stop distance), etc. Obviously it's not the same variables if one is scalping vs trading daily ranges. You trade and know all of this already, why do you need examples? :)
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Only to make a point :)

The point being that the actual leverage used number (which a few people are advising doesn't exceed x:1) isn't important, it's what I call a by-product calculation of other more important calculations.

Saying don't use more than x:1 leverage can be very misleading and lead to under/over leveraging, plus it's an irrelevant and needless calculation to make and can't be used to determine trade size on a per trade basis.

I never bother to work out the leverage I used for a trade, there's no need.
 
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