August 10, 2010

Is using 1:50 leverage trading forex okay to use rather than 1:100 leverage? (please help)?

By Planet Wealth

I am going to be 18 in a few days and I have had a practice forex trading account for a few months and have been experimenting with it in terms of leverage and stop-losses so that I am prepared for the real thing. I have learned that using the recommended stop-losses is not a excellent thought as far as profit is concerned for me, especially on 1:100 leverage as you lose money everytime.

I tried using 1:100 leverage on larger stop-losses such as the size and value of my entire trading capital. I’ve won 2 times this way, but I still reckon its very perilous as there is a high probability of being wiped out eventually at some point. I reckon that using 1:100 leverage is like gambling. I’d been using 1:25 leverage and set stop-losses of the value of all of my trading capital and was winning every time I did this without failure and was generating 10%+ profit every day.

What I’d like to know is in your opinion would I still be okay if I did what I was doing with 1:25 leverage and a much higher stop-loss, but used 1:50 leverage instead of 1:25? What would you suggest here?

Topics: Uncategorized | 2 Comments »

2 Responses to “Is using 1:50 leverage trading forex okay to use rather than 1:100 leverage? (please help)?”

  1. agent4927 Says:
    August 10th, 2010 at 12:44 am

    To start with I wouldn’t use any leverage at all. You shouldn’t really risk any more than 2% of your capital on any one trade and no more than 6% in total at a time. Start playing with high leverage and then you could lose all of your capital very quickly.

    You are also unlikely to get any margin as a novice trader with no trading history or capital to back up the risk involved in using high leverage.

    You will find trading with real money is very different to using a practice account – you have no thought of the emotional rollercoaster that will place you through.

    I would recommend reading The Online Trading Athlete before you do anything.

    95% of investors lose money trading FX for a reason – a 10% daily return may sound fantastic in principle, but in practice you are extremely unlikely to get that consistently, 10% per week is more realistic.

  2. Net Advisor™ Says:
    August 10th, 2010 at 12:44 am

    I reckon you’ll learn that when you use real money in real time you will have very different outcomes.

    I don’t see how an 18 yr ancient could even qualify for a Forex account with no prior market experience. Simulators don’t count from a compliance view.

    I would not be in this market at all, esp as an amateur. I would be focusing on college.

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