Leverage beyond 1:100?

Quote from davidmaria1:

Pretty tough to argue with those results.
Great job Publix!
The best part, in my opinion, was the withdrawal at the end:p

PS. I shopped at Publix when I lived in Sarasota. Good prices.
More...

Forex is not really my department(yet). This was just "experimentation". But the point I was trying to make is that as long as you have very specific entry and exit points and precise stops you can live with leverage significantly above 10:1. In fact, if I could only do 10:1 Forex would be a waste of my time.

People like TraderZones are just like people who hold on to the steering wheel for dear life and go 5 miles BELOW the speed limit.
 
no offense man, good reports and all, but you posted days with ALL winners.

How many losers would it have taken to wipe your account out?

I admit its all about risk, not leverege, but how many pips can you risk with 50 to 1?

Account: 1000
Position size 50 000
assume XXXUSD cross at 5$/tick

if you risk 1%, your stop is 2 ticks
2%, 4 ticks
5%, 10 ticks (the spread at fxcm right now for AUDJPY is now over 10 ticks as I glance over, i know it PnLs in yen so its not exact but ...)
10%, 20 ticks

This trading is not suitable for many, risking 10% of their account to have 20 ticks of room. In fact, I doubt it will work in the long run for anyone. I feel like this kind of leverege will work with a high expectancy system until it doesnt, then you will be back at square 1.
 
Quote from milktruck:

no offense man, good reports and all, but you posted days with ALL winners.

How many losers would it have taken to wipe your account out?

I admit its all about risk, not leverege, but how many pips can you risk with 50 to 1?

Account: 1000
Position size 50 000
assume XXXUSD cross at 5$/tick

if you risk 1%, your stop is 2 ticks
2%, 4 ticks
5%, 10 ticks (the spread at fxcm right now for AUDJPY is now over 10 ticks as I glance over, i know it PnLs in yen so its not exact but ...)
10%, 20 ticks

This trading is not suitable for many, risking 10% of their account to have 20 ticks of room. In fact, I doubt it will work in the long run for anyone. I feel like this kind of leverege will work with a high expectancy system until it doesnt, then you will be back at square 1.
More...

In the long run we are all dead. You know this phrase? It is hopeless to debate what will or won't work in the long run. What I said before and I what I will repeat now, choice of leverage (and results) depend on trader skill first and foremost. What may seem impossible to people like TraderZones is quite possible to others.
 
Quote from aiyah_mark_lah:



Have you given up on CMC already by any chance ?
More...

Yep I'm going to close the accounts at the end of the year, too many price freezes and spreads are all over the place, the platform was never that feature-rich and it's getting worse with every update, plus their Customer Services has taken a quality dive......just another bucketshop gone bad unfortunately :(

Marketmaking is a competitive business and there are better deals out there than what CMC are offering right now.


Nice statements by the way!
 
Quote from milktruck:

no offense man, good reports and all, but you posted days with ALL winners.

How many losers would it have taken to wipe your account out?

I admit its all about risk, not leverege, but how many pips can you risk with 50 to 1?

Account: 1000
Position size 50 000
assume XXXUSD cross at 5$/tick

if you risk 1%, your stop is 2 ticks
2%, 4 ticks
5%, 10 ticks (the spread at fxcm right now for AUDJPY is now over 10 ticks as I glance over, i know it PnLs in yen so its not exact but ...)
10%, 20 ticks

This trading is not suitable for many, risking 10% of their account to have 20 ticks of room. In fact, I doubt it will work in the long run for anyone. I feel like this kind of leverege will work with a high expectancy system until it doesnt, then you will be back at square 1.
More...


You're missing the bigger picture.....have you ever heard of compounding?

Forex must be about the best market for scalability, why not take advantage of it?
 
Quote from milktruck:

you didnt answer the question.

People who trade for a living care about the long run.
More...

Anybody can sit and say "this is so risky" and you must only invest in AAA bonds or Treasuries or Stocks of the Blue Chips for the long term or CD and you should never risk more than 2% in a trade and other crap.

As we know from finance (or should know) risk should be proportionate to return. I risk 100% in a position to potentially get 300% or more. With good stops(!) and non 400:1 leverage it is practically impossible to lose 100% anyway. This to me is a better proposition than buying Junk Bonds for example.

Without knowing how I trade or why I trade you seem to draw pre determined conclusions.

My background is that of an options trader and for the 99th time I don't need a lecture about risk management. I know what I am getting myself into and what to expect.
 
cable

yeah, compounding is another issue. none of those trades overlap from what I remember, the 50:1 initial position risk parameters are still applicable. I think compounding is the most brilliant thing in the world.

publix

I guess it makes sense you are an options trader with that all-or-nothing strategy. Im not being condecending, it just makes sense, as I did a stint in options. Nobody is telling you to buy treasuries, man. Thats not the only alternative to extreme leverege. Haha lighten up, its all good, I shop at publix too (they just opened one across the street from me in Orlando).

Whatever your level of skill, you will have those 100% losses, although that would give you more reasonable room for a stop. Maybe you will make this work, but Ive not seen one account that could for the hundreds Ive come across that swing for the fences and then reload. Then again your average forex trader is a gambler trying to feel sophisticated about it, so maybe that doesnt say much. Best of luck tho man.
 
Interesting topic.....Ive been trading forex for over 2 yrs. I almost always use 50:1 margin on my euro-usd scalp trades that typically last no more than 30-45 min. Now If I see a nice setup like for example: price bouncing up/down and off a major fibonacci line on overlapping 5 min, 15min, 60min charts and rsi indicator is confirming the direction then I typically increase my margin to 75 or 100:1 with a hard stop about 7-10 pips away.....once the market moves in my direction and shows strong momentum then I have at times(10-20% of my trades) upped my margin to 300:1 thru scaling in of additional lot(s) size. This method of increasing margin to over 200-300:1 and higher is obviously meant for only the most experienced who know how to manage risk.

note: I avg 200-350 pips per week(3-6 trades/day).

cabletrader....whats the highest margin you have used on a trade?......just curious
 
Quote from joemiami:



cabletrader....whats the highest margin you have used on a trade?......just curious
More...

Due to broker limitations 50:1 on Oanda and 100:1 on CMC, but I would have quite comfortably used 250:1 on original equity had it been available from a broker who aren't manipulating thieves :)

That seems to be the thing in this business, the higher the leverage offered - the worse the broker becomes!
 
You must log in or register to reply here.
Back
Top