DislikedIf money management is the key to making forex profitable, what level of margin vs equity would be good, especially if you want to be a long term trader. Thanks for any input.Ignored
High leverage vs Low leverage 73 replies
High Leverage vs Low Leverage 21 replies
High Leverage vs Low Leverage 20 replies
Is high leverage really bad for you? 10 replies
Hi! I’m Mr Short and I’m a bad forex trader! (the AA for bad traders) 67 replies
DislikedIf money management is the key to making forex profitable, what level of margin vs equity would be good, especially if you want to be a long term trader. Thanks for any input.Ignored
DislikedWall,
I think this is a very insightful post.
The problem with leverage is and has always been about temptation. Personally, I see no problem with having 400:1 or even 1000:1 leverage, but that's because I've learned to control the urge to use the leverage.
Whether or not this is a good thing is a very individual decision, BUT the recommendations for NOT using higher leverage are very sound. I personally, have the common 50:1 or 100:1 leverage or even 200:1 leverage with my mini accounts, but I don't actually max out my leverage. I trade according...Ignored
DislikedThat is a fantastic post,and I hope others will learn from it,and I totally agree with everything you've saidIgnored
DislikedI trade according to my risk profile, and that is what I recommend for anyone.
Leverage is merely a tool. If you know how to use it wisely, then it can be useful. If you don't, then you'll hurt yourself.Ignored
Dislikedcloggie says it best, YOU IDIOTSS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Ignored
DislikedWhether or not this is a good thing is a very individual decision, BUT the recommendations for NOT using higher leverage are very sound....leverage is and always has been a personal decision...for me, the math works out whether I have 1:1 leverage or 1000:1...I can't say the same for anyone else.Ignored
DislikedThere's nothing wrong with my post, it's simply math, boiling down mm stats to readily-applicable terms.
However, I do get your overall message, even if it was probably directed at this type of attitude, and not at what I said:
This is absurd. There's eons of difference between the two.
It's not a "personal decision", it's what
(your trading ability
minus
the random factor of how important what you missed in the market is)
equals
(how many times you can lose and still keep trading
times
how much you can lose each trade),
or something like this.
I...Ignored
Dislikedi'm convinced you know nothing about trading. your little mm spiel seems to be using the word leverage in place of lot size, and makes no sense whatsoever.
LEVERAGE RELATES TO MARGIN! not lot sizes. not trading ability. not any other random trading term someone wants to throw around.
if you don't understand leverage then you don't understand margin. if you don't understand margin then you don't understand leverage! it's not hard stuff to get the head around.
some of you guys should really do yourselves a favor and just stop.... everything.
>/...Ignored
The rules for where and when margin calls and margin-call warnings happen varies for different broke rs.
That's cool if you want to correct my understanding of the terms, just please lay off the generalizations. Lot size and leverage have little to do with each other, since they both depend on account size to mean anything, and I didn't include account size in my post. I misused the term "margin", yes; I meant, "leverage". Anyway, the full version of my understanding is above.
DislikedI only have two to three months of real trading experience (which ended about three years ago, before joining ff) with leverage 4:1 or over, where using leverage gets really serious,
but I have ten years (mostly 2:1) before and below that.
Here are the basics to trading with leverage, as I get it --
Account size * leverage = lot size. Get rid of or add some lots at the same price (minus commission, spread), and leverage drops or increases respectively; otherwise, during a trade, it's price, or the number of pips from one's entry, that matters.
Leverage...Ignored
DislikedIn the practice, there are many traders benefit from their max leverage but they don't use their max risk that can be benefited from the leverage (nearly margin call level). It's because they can only tolerate a very small losses.Ignored
DislikedI only have two to three months of real trading experience (which ended about three years ago, before joining ff) with leverage 4:1 or over, where using leverage gets really serious,
but I have ten years (mostly 2:1) before and below that.Ignored
QuoteDislikedHere are the basics to trading with leverage, as I get it --
Account size * leverage = lot size. Get rid of or add some lots at the same price (minus commission, spread), and leverage drops or increases respectively;
QuoteDislikedotherwise, during a trade, it's price, or the number of pips from one's entry, that matters.
Leverage applies to margin,
distance to margin call applies indirectly to number of pips before stopped out,
and number of pips before stopped out applies to trading ability.
Thus, be more able to survive price's dips against one's trade direction, and one can trade higher leverage. Or, as I put it earlier, 'it's easiest to equate leverage with #pips one's (mental) SL is, to define one's risk.'.
QuoteDislikedThe rules for where and when margin calls and margin-call warnings happen varies for different broke rs.
That's cool if you want to correct my understanding of the terms, just please lay off the generalizations.
QuoteDislikedLot size and leverage have little to do with each other, since they both depend on account size to mean anything, and I didn't include account size in my post. I misused the term "margin", yes; I meant, "leverage". Anyway, the full version of my understanding is above.
DislikedMargin is a token amount of money put forth by a trader to enable them to trade size larger than the margin amount. it's money the broker can claim as their own when a trader loses money in a trade. it's a bit like taking a loan from a bank and putting your house as collateral... the house is like margin and you either repay the loan or they take your house. when you open a trade you don't have to have the size of money in your account that you want to trade at, you only need a small slice of money (margin) compared to the size of the trade you...Ignored
DislikedI have NEVER seen or known of a LONG TERM successful retail trader that trades with lots of leverage. I have however seen and known LOTS of traders who have busted their accounts frequently ( and STILL DO after many years ) in hopes that they will be rich over night. Most of these people who use lots of leverage can make substantial amounts of money and you will read about there gains on every forum. But truth betold is, one day they will be here, and the next day they will not. NOT becuz they turned a few 000's in 000,000's
If you make ridiculous...Ignored
QuoteDisliked* I once traded with high leverage of 400:1 ( back in 2005-6 I think) During the NFP release. I also traded the GBP/USD. I was short before the release, like a noob, and lucky me, the pair started dropping. So I shorted more, and it kept dropping as the news release came out. So I shorted A LOT more, and I kept shorting it with every new spec of equity I had. Eventually the pair was +100 pips in profit if i remember correctly. then it started to consolidate for a few minutes, and I remember seeing my EQUITY which before NFP was about $250, and...
DislikedBrokers know well: more than 50% traders lose their money, and they do everything that they lose their money faster. They give you 30% bonus, so you can trade with bigger lot size, they give you 1:500 leverage, so you can blow up your account faster. They will teach you, they will tell you a lot of useful information, they will do everything to help you lose all your money as fast as possible. WHY?
Your losses are their gain. Who wants to earn more money - everyone!!!
And yes, high leverage is bad for traders!
JosefIgnored
QuoteDislikedyeah let's all hold hands, sing songs, and ban all leverage. let's also ban sharp knives and replace all cutlery with plastic kids cutlery. let's make speed limits a maximum of 10 mph. let's make running illegal since falling over is dangerous. blah blah blah. put the world in a padded room and tie our hands behind our backs.