rather than speak in terms of leverage, the way i do it is that i set my stop-loss on any given day to 3% of my account balance. my best days i've made as much as 6% but average more reasonably about 2% and outway winning to losing days at about 4-1. the leverage i employ though is quite large, i pair trade with total leverage at about 30:1
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Leverage beyond 1:100?
- Thread starter tmclimon
- Start date
People seeking high leverage should understand the concept of "Risk of Ruin." Anyone regularly using 100:1 leverage will become a poster child for this definition quite a lot in his life...
Quote from Trader KGB:
Right, we're on the same page here. I don't think anyone here is concerned with leverage as a significant factor of the trade-size decision other than the OP. It is, as you said, a by-product calculation based upon other factors.
That being said, I'd really like to see an example of a 150:1 trade employed in a safe r/r scenario, which you agreed with operator was possible.
As euclid correctly pointed out, at such leverage, the spread is going to cost you 1-4% immediately (it will differ based upon the spread, but it will be in that neighborhood).
Think outside the box for a minute, don't be frightened off by the leverage doomsayers.....
Leverage and compounding can be powerful tools, but just like a loaded gun the user needs to know which is the dangerous end or he'll end up shooting himself in the foot! I just wish Oanda would stop playing noobie nursemaid and increase their pathetic 50:1.
There are times during the month when I could quite comfortably use >200:1 and still maintain an acceptable risk.
A point of interest: some of Soros's money management strategies employ what to the uninitiated would seem like suicidal gearing!
Quote from cabletrader:
Leverage and compounding can be powerful tools, but just like a loaded gun the user needs to know which is the dangerous end or he'll end up shooting himself in the foot! I just wish Oanda would stop playing noobie nursemaid and increase their pathetic 50:1.
Same with IB - it's hard luck for short term traders who get on a big trend and want to keep adding to a position.
honestly, totally honestly...I would trade with 400-1 or even 600-1 leverage...what Forex brokers offer the highest leverage?...again, totally serious...
Quote from milktruck:
how come bucketshops will give you up to 400 to 1 and they only get 30 to 1 at the bank (if that anymore)?
BECAUSE ANYONE USING THAT KIND OF LEVERAGE WILL BLOW UP VERY QUICKLY! THANK YOU COME AGAIN!
You are 1 smart dude !
The HIGHER the leverage , the QUICKER the bucketshop can take your money with their games.