**FinanceEngineer:**

I don't understand my back testing result for some of my trading system. It does not matter what leverage I choose on my strategy tester I still get the same profit. Is it correct?

This is when I set up leveage 1:500 using 0.1 fixed lot with initial capital 1000 GBP on the strategy tester. The final profit is 1957.36 and relative drawdown of 13.10%.

This is when I set up leveage 1:100 using 0.1 fixed lot with initial capital 1000 GBP on the strategy tester. The final profit is 1957.36 and relative drawdown of 13.10%.

Both graph looks exactly the same. According to the two graphs, the chosen leverage does not have any effect on profit or drawdown. Even the leverage 1:20 would have the exactly same graph as above. Is it suppose to be true? I am not quite clear with this. So what is signifance about the leverage?

If your lot is fixed, then leverage doesn't have influence on your profit. Leverage have influence on your stopout risk, you can see that on the charts you posted. The part in the bottom shows your margin level, as you see the values for leverage 1:100 are approximatively 5 times lesser. You are still far away from stopout (around 100% of margin level) but you are a lot closer with leverage 1:100 than with 1:500.

High leverage can be dangerous if used inappropriately. For example if you base your lot on margin level, instead of fixed 0.1 lot you can get 0.5 (or maybe 0.4 ...) with 1:500 leverage. In this case your profit will grow but your drawdown also, and become very dangerous for your account.

I don't understand my back testing result for some of my trading system. It does not matter what leverage I choose on my strategy tester I still get the same profit. Is it correct?

This is when I set up leveage 1:500 using 0.1 fixed lot with initial capital 1000 GBP on the strategy tester. The final profit is 1957.36 and relative drawdown of 13.10%.

This is when I set up leveage 1:100 using 0.1 fixed lot with initial capital 1000 GBP on the strategy tester. The final profit is 1957.36 and relative drawdown of 13.10%.

Both graph looks exactly the same. According to the two graphs, the chosen leverage does not have any effect on profit or drawdown. Even the leverage 1:20 would have the exactly same graph as above. Is it suppose to be true? I am not quite clear with this. So what is signifance about the leverage?