Basic understanding of Leverage

[gkintl]

Leverage is simply the process of getting higher purchasing power relative to our investment. Leverage is provided to encourage traders to do high volume. This in turn benefits the forex broker in the form of commission or brokerage they make from their spreads. Leverage is a double-edged sword. It can multiply the profit or loss substantially. It is always better to stick to a leverage of 1:100 or less.

 

[sindarin]

Leverage is simply the process of getting higher purchasing power relative to our investment. Leverage is provided to encourage traders to do high volume. This in turn benefits the forex broker in the form of commission or brokerage they make from their spreads. Leverage is a double-edged sword. It can multiply the profit or loss substantially. It is always better to stick to a leverage of 1:100 or less.

So that is why i trying as the best as i can lowering my own leverage if i really need, my lowest leverage is 1:100 because i think that is the balanced amount with nice risk and also if we can trade with more lot we will make a lot of profit from our trading

 

[Daisy]

It also depends on the lot that you are using. If you're using a lower lot, you can use higher leverage as its not that much capital. However, if you're using high lot, its wise to use only up to 500 cause too much can be high risk. The market can be really unpredictable at times even in long term trading. In long term trading, the market can slide downhill so quickly and you have to wait like days before it will go back up to where you bought it. So, since its so unpredictably, you would offset the risk with just low or modest amount of capital.

 

[Pettyeve]

It is good that the newbie traders who are trading in here in forex will understand how they will be applying their leverage. Leverage is something that is good and it is also ssomething that is bad when the trader use a higher leverage.

 

[Decub]

An understanding of the leverage system and the way it works is quite good. It helps a trader know the implications of using a high leverage. Basically, it is the newbies who usually fall into the pit of using a high leverage system all in a bid to maximize profit. They only see They advantage of it without taking into consideration, ghetto negative effect.

 

[willy]

the leverage will make us trade with huge amount of money but when the leverage increase like 1:2000 with some brokers this means we will trade with very small used margin comparing with 1:200 leverage but used margin is the amount of money will stay after margin call if this happened then the 1:200 leverage is low risky than 1:2000

 

[rexway]

that ratio of leverage seems to be very risky dude I will even go with my plane never to trade with high leverage as its very risky doing ,we don't need to trade with high leverage all we need to do is follow our strategy and ensure that we trade with proper understandintg ,
if you have the money I will advice you to invest from your pocket and forget about the leverage of a thing

 

[kasual]

Leverage enabling us to trade with higher capital though actually we are have capital in trading account. If we are choose to use 1:100 leverage, mean we are trade $1 which it equal with $100 if we are trade with standard contract. With laverage, traders have chance to trading though have small capital only.

 

[Decub]

that ratio of leverage seems to be very risky dude I will even go with my plane never to trade with high leverage as its very risky doing ,we don't need to trade with high leverage all we need to do is follow our strategy and ensure that we trade with proper understandintg ,
if you have the money I will advice you to invest from your pocket and forget about the leverage of a thing

Some traders would simply want to risk it in a do or die affair anyway. They got nothing much to lose, they just go for a very high leverage and try to risk it all, usually with small capital. I have a friend who always does that. He is simply good at taking such risks and it works for him sometimes.

 

[kasual]

Leverage like double edge sword. In one side enabling traders to trade with big lot size though have small capital. But in other side, such way will make traders to get margin call very fast if they are have no sufficient knowledge and experience to perform proper trading. Advisable if traders not choose to use maximum leverage available such as 1:1000 because it will make minimum lot value increase very high.

 

[UMOFX AIR]

Yes it is right leverage support us in a manner that we can trade with less money used from our account and trade more from market. But high leverage becomes a killer if not control on it in time. It eats account rapidly .

 

[pithyon]

yes. i like 1:500 leverage. it help us trade with bigger volume

 

[Decub]

Trading with bigger volume in other to increase the size of our capital is not where the problem is. Where one would find it hard is the implications of doing so. There is no easier way to trade in Forex besides keeping it simple. Of you trade with big volume and lose, you also lose higher value of your profit.

 

[budado]

Until now I still do prefer to use 1:100 leverage. I don't like to use higher leverage. For me the smaller the leverage the better chance for me to survive market volatility. I always try to keep 500% free margin with my 1:100 leverage.

 

[robin.bob]

Leverage is certainly an important element, because it separates the ordinary market participants from margin traders. But we must remember that brokers often manipulate this concept when they deal with beginners. Therefore, if such a broker as Teletade advises you to maximize your leverage, you have to understand that this is a bad idea.

 

[gabanda]

Leverage of the broker is very profitable for traders because of the leverage it will allow us to trade with the maximum. For that, we need to use the leverage it well, so that will allow us to trade with the maximum. For now, I am more comfortable trading with leverage 1: 1000 in instaforex

 

[Dmitriy Ushakov]

The higher the Forex leverage is, the higher risk of loss of deposit you bear. Therefore, by reducing the Forex leverage (and, hence, volume of trading positions), you also reduce the probability of loss. FreshForex provides leverage from 1:25 to 1:1000 depending on type of account and its balance. There is an opportunity for both beginners and those already trade at a higher level

 

[gabanda]

leverage will help us to be able to trade using small capital. With leverage, the small capital will look like with big capital. for that, I prefer to trade using leverage 1: 1000

 

[Nezami]

Leverage is considered as an important financial tool which an investor should consider when choosing a broker. It allows an investor to grow his market exposure to a level that exceeds the initial investment. We the traders in particularly the newcomers try to make profit very rapidly by using high leverage. But, I think, before trading with high leverage , we have to know how to manage risk.

 

[kxforexmart]

As a trader we have to understand the basic of leverage ratios so that we can trade with a particular money management to get rid of the margin call ,for that we have to be very much experienced with the basic knowledge related to the Forex field.