Understanding Leverage
Hello everybody
I've been trading for over a year (following markets for over 5 years). I turned my 100k demo account to 230k in a year using price action strategies. I traded the EUR/USD and GBP/USD as I liked the liquidity and volatility.
I opened a live account a few months ago, risking only $20 of my own money, I haven't been able to trade the EUR/USD and GBP/USD as I get the "Not enough money" message every time I try to open a new position. I trade small positions (0.01 lots) and I decided to select 1:1 leverage on my live account as I thought 1:300 (Leverage on my demo account) would get me into debts. I trade GOLD because I cannot trade the EUR/USD and GBP/USD. I am failing miserably, the volatility is killing me. (Triggers stop loss and then goes in the originally anticipated direction).
Thing is, I do not understand leverage. I've tried over and over again to understand it but I still don't. Would it be possible to get into debt even though I trade 0.01 lots and practice proper money management?
Please help me here, I've missed a lot of opportunities on the EUR/USD and GBP/USD. I am fed up, I miss good opportunities on those pairs only to enter rubbish trades on the XAU/USD.
Yours sincerely
Kevinleverage means imagin you have 100$ account and equity is 10$ if your leverage is 1:200 you cant take any positions it says :not enough money: if your leverage is 1:2000 then you can keep further trades though ur equity is 10$
many brokers close the highest floating loss due to lack of leverage or margin
I think what you're missing is the good management of capital through trading with capital of at least $ 100 and leverage of 1: 200
I think what you're missing is the good management of capital through trading with capital of at least $ 100 and leverage of 1: 200
Professional traders are usually using leverage of 1:7 to 1:8. Usually it is considered that any leverage greater than that is dangerous. Also, one of the major problems of any trader is underfunding. I do not know if profit from $100 account will cover expenses there where you live (in some countries even a $0.5 a day is considered a lot in some it is not) but on average, $100 is not enough for serious trading
Well, obviously he is not out there for serious trading as most term it. It's what he could afford at the time and (I imagine) to see if it will be different than his demo.
Well, obviously he is not out there for serious trading as most term it. It's what he could afford at the time and (I imagine) to see if it will be different than his demo.
Maybe he is using that account for learning. Using that small live account is not such a bad idea - it will quickly teach you what does it look to lose real money
Maybe he is using that account for learning. Using that small live account is not such a bad idea - it will quickly teach you what does it look to lose real money
I don't think so
Usual cause for underfunding is hope not a wish to learn
you can find many information about definition of forex market, including margin and leverage explantion.
while you may need more informative way of learning, a video explanation would be more interesting
https://www.youtube.com/watch?v=xbs7Khix9rM
short brief contain basic fx knowledge including how to calculate profit/loss, margin and how leverage affect your trading account.
for detailed information, you may want check fx education tutorial Advanced Forex Trading Video Tutorials , move to basic fx knowledge section, it worth of try, it's free stuff anyway.
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Hello everybody
I've been trading for over a year (following markets for over 5 years). I turned my 100k demo account to 230k in a year using price action strategies. I traded the EUR/USD and GBP/USD as I liked the liquidity and volatility.
I opened a live account a few months ago, risking only $20 of my own money, I haven't been able to trade the EUR/USD and GBP/USD as I get the "Not enough money" message every time I try to open a new position. I trade small positions (0.01 lots) and I decided to select 1:1 leverage on my live account as I thought 1:300 (Leverage on my demo account) would get me into debts. I trade GOLD because I cannot trade the EUR/USD and GBP/USD. I am failing miserably, the volatility is killing me. (Triggers stop loss and then goes in the originally anticipated direction).
Thing is, I do not understand leverage. I've tried over and over again to understand it but I still don't. Would it be possible to get into debt even though I trade 0.01 lots and practice proper money management?
Please help me here, I've missed a lot of opportunities on the EUR/USD and GBP/USD. I am fed up, I miss good opportunities on those pairs only to enter rubbish trades on the XAU/USD.
Yours sincerely
Kevin