That’s true. In trading, you got to go big. If you want to earn big you have to invest a big amount of money. A hundred dollars can’t bring you a profit of thousand dollars.
The biggest factor that blocks Forex Traders from profit is undercapitalization
- Thread starter ElectricSavant
- Start date
You guys all got it wrong.
You misunderstood undercapitalization for high leverage.
If you trade ES with $1000, this is undercapitalization.Because you need at least $5000 for 1 contract or it will become gambling.
If you trade ES with $100000,but you trade 100 contracts,this is too high leverage.This is also gambling.
But:
In former situation you can't manage your money because your money is not enough.
In later situation you have enough money but you set wrong leverage.
See the difference?
The problem in forex is leverage,not undercapitalization.Because even you only have $100,you still can set a right leverage and make profit.
Also I don't thing biggest problem in forex is leverage.
Leverage is one of factors. Edge is the main problem.
Once you have edge developed, leverage is relatively easy to adjust.
You misunderstood undercapitalization for high leverage.
If you trade ES with $1000, this is undercapitalization.Because you need at least $5000 for 1 contract or it will become gambling.
If you trade ES with $100000,but you trade 100 contracts,this is too high leverage.This is also gambling.
But:
In former situation you can't manage your money because your money is not enough.
In later situation you have enough money but you set wrong leverage.
See the difference?
The problem in forex is leverage,not undercapitalization.Because even you only have $100,you still can set a right leverage and make profit.
Also I don't thing biggest problem in forex is leverage.
Leverage is one of factors. Edge is the main problem.
Once you have edge developed, leverage is relatively easy to adjust.
Last edited:
Understood. But many regulated brokers won’t let you have a higher leverage. Sad but good in a way. They are only looking out for the trader.
But isn’t it better than overtrading?
The biggest factor is not understanding statistics, probabilities and being able to create a strategy to take advantage of anomalies.
It’s very contradictory and honestly depends on trader to trader. As for me, I prefer keeping a track on how much to risk on a particular trade. Like, with turnkey forex, I keep it 3% and with etoro, I go a bit adventurous and risk up to 5-6% (even though I trade very little with this account). I believe in keeping the risk percentage sustainable and reaching the trading goals as the ultimate purpose with the amount of risk I’m taking.