What leverage do you use?

That's eactly what drtermines what size I trade.

$50,000 maximum risk is 2% so $1,000 then work out from there.

what I am amazed at is the size of leverage many people use....
 
Quote from chipmunk:

I've just set up a $100,000 demo account and see I have the power to buy $10M worth of Euro/$.

WAY too leverage for me. I think of it as "how much will I lose"

so if you have a $100,000 what levage are you using? 2X,3X,5X? No leverage?

Thank you
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FWIW, I saw an interesting study a few years back (for futures), that seemed to indicate that about 7X leverage was the optimal tradeoff between risk & reward.
 
Quote from cabletrader:

Calculate risk not the leverage you use, for example....

Account Balance: $100,000
Risk: 2% - $2000.00

Eur/Usd Sell @ 1.2575
Stop Loss @ 1.2625

$2,000 divided by your 50 pips stop loss = $40 per pip = 400,000 trade size

-or-

Account Balance: $100,000
Risk: 1% - $1,000.00

Eur/Usd Sell @ 1.2575
Stop Loss @ 1.2595

$1000 divided by your 20 pips stop loss = $50 per pip = 500,000 trade size

-or-

Account Balance: $100,000
Risk: 5% - $5000.00

Eur/Usd Sell @ 1.2575
Stop Loss @ 1.2585

$5000 divided by your 10 pips stop loss = $500 per pip = 5,000,000 trade size

etc etc etc....just adjust trade size according to the risk you're prepared to take and the stop loss of the individual trade.

Nowhere did you need to work out your leverage, it doesn't matter.
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Thats the answer.

First determine stop size (in pips). Then what % that stop size represents of your account (usually 1 to 3%).
 
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