Maximized Leverage

P

Pension_Admin

As everyone already know, leverage is a double edge sword. Those who don't know how to use leverage are bound to get hurt by it. Those who knows can maximize their return with it.

So, for those who know how to use leverage, have you ever gotten close to maximizing your leverage? Also, how did it turn out?

Thanks!


PA
 
It is quite simple. The higher your win rate and shorter your TF, the more leverage you can use. I do not know of an edge that is sharp enough to really sustain high amounts of leverage. At one point you will experience high DDs.

Those that only use around 1:1 - 1:10 tend to last longer in this game.
 
LTMC blew up because the big IB's wanted to remove LTMC's threat and its business, by taking the same positions as LTMC and started to drive the market direction against LTMC.
 
Quote from adadadog:

LTMC blew up because the big IB's wanted to remove LTMC's threat and its business, by taking the same positions as LTMC and started to drive the market direction against LTMC.
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Watch the dyslexia when you trade!

(I know you meant LTCM)
 
Quote from adadadog:

LTCM blew up because the big IB's wanted to remove LTCM's threat and its business, by taking the same positions as LTCM and started to drive the market direction against LTCM.
More...

Yes, I understand that part, but I would believe if they know how to use leverage, blowing up would not have happened. They had a good offensive game, but they lacked defense.
 
Quote from Pension_Admin:

As everyone already know, leverage is a double edge sword. Those who don't know how to use leverage are bound to get hurt by it. Those who knows can maximize their return with it.

So, for those who know how to use leverage, have you ever gotten close to maximizing your leverage? Also, how did it turn out?

Thanks!


PA
More...

PA,

Knowing how to use leverage is important… but you are forgetting one small detail Sir

No one will ever know / or can guarantee which trade(s) “will” work…..

So you can use all that mighty leverage you wish – but it may very well bite you square in the ass



No trader would do this… As flash in the pan, a greedy bastard, an egotistical person, a trader with no discipline – just may…


But a real trader – nope

We’re in this game for the long haul… or at least until we’ve made enough we can walk away for good.

One trade will never make me wildly rich… but on the other hand one trade will never break me either (at least not any more because I now know the risk involved)


I would respectfully suggest gaining more of an appreciation for the risk associated with trading (remember Livermore)


Food for thought Sir

RN
 
Quote from Redneck trader:

PA,

Knowing how to use leverage is important… but you are forgetting one small detail Sir

No one will ever know / or can guarantee which trade(s) “will” work…..

So you can use all that mighty leverage you wish – but it may very well bite you square in the ass



No trader would do this… As flash in the pan, a greedy bastard, an egotistical person, a trader with no discipline – just may…


But a real trader – nope

We’re in this game for the long haul… or at least until we’ve made enough we can walk away for good.

One trade will never make me wildly rich… but on the other hand one trade will never break me either (at least not any more because I now know the risk involved)


I would respectfully suggest gaining more of an appreciation for the risk associated with trading (remember Livermore)


Food for thought Sir

RN
More...

RN,

As always I respect your suggestion and I agree that no one would know for sure which trade will work. Once the trade is placed, it's always 50/50.

I would like to add that it would be absolutely foolish and egoistic to load up into maximum leverage in that situation.

PA
 
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