August 9, 2011

When trading forex what is the difference in cutting leverage in half and cutting order size in half?

By Planet Wealth

Is there a difference between the two?

Profit/loss will be cut by the same amount either way, right?

Topics: trading tips | 3 Comments »

3 Responses to “When trading forex what is the difference in cutting leverage in half and cutting order size in half?”

  1. Yarcofin Says:
    August 9th, 2011 at 3:10 am

    Cutting leverage means that you will be wielding less power with every dollar you invest.

    If you invest $10,000 at 100-to-1 leverage, you are essentially controlling $1,000,000 worth of assets.

    At 50-to-1 leverage, your $10,000 is only controlling $500,000 worth of assets.

    Both ways, the most you can lose is your initial $10,000.

    Cutting order size means you are investing less at a time.

    Say you buy one $500 lot instead of 2 $1,000 lots.

    That’s my understanding, anyway.
    You are better off cutting lot size than leverage, I reckon.

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    August 9th, 2011 at 3:10 am

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  3. Nashroll . Says:
    August 9th, 2011 at 3:10 am

    First of all you should know what is the leverage and order means. It’s 2 different things.

    leverage: if your leverage is 1:100, that’s mean you can trade 100 000 if you have 100 in hand

    order: the actual money involved is depends on your leverage and money in account.

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