Are the days of high leverage over? - page 3

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Well, the leverage is very important for me.

When I am running a strategy, which under no circumstances goes to more than 10% DD, then with a help of the leverage I can decrease funding of the account by 80% and keep those 80% reserve safely in my bank rather than with my (unsafe) broker.

"Protecting" folks by simply reducing maximal allowed leverage is a naive idea, they should rather educate them that trading is not suitable for incompetent noobs, who cannot calculate.

 

But if you decreased the funding and keep the same leverage, the risk us growing and you will not be able to keep 1) either income 2) or risk at the same level

 
whisperer:

That is so true

People really should try small accounts with high leverage just to see what it looks like to lose fast

Hi, I slightly disagree from your perception. A trader should always remain flexible and should never have any rules engraved on stone. When the market is range bound (low implied volatility), a trader can use high leverage to his benefit. What should never be avoided in that case is only the stop loss order. If you have the ability to pinpoint entries then high leverage would certainly grow your account quickly. Needless to say that entries should be based on a well-tested trading system and backed by proper justification and discretion.

 
on my own:
But if you decreased the funding and keep the same leverage, the risk us growing and you will not be able to keep 1) either income 2) or risk at the same level

Not sure what you mean by "keeping the same leverage". I know the leverage before I fund the account and I cannot change it. Just in case of higher leverage I need less funding for the same trading activity and the same risk, which makes me more comfortable.

 
Ovo:
Not sure what you mean by "keeping the same leverage". I know the leverage before I fund the account and I cannot change it. Just in case of higher leverage I need less funding for the same trading activity and the same risk, which makes me more comfortable.

That is what I meant : you started the account with nnn and leverage mmm

Then the account becomes nnn-xxx and the leverage is still mmm

That changes the whole calculus (including the risk)

 
Ovo:
Not sure what you mean by "keeping the same leverage". I know the leverage before I fund the account and I cannot change it. Just in case of higher leverage I need less funding for the same trading activity and the same risk, which makes me more comfortable.

Use of higher leverage coupled with low margin money will cause problems in case you need to carry forward the trade to next week. Is it not? Even my broker Alparioffers a leverage of upto 1:1000 for standard and ecn accounts. However, at the end of week (Friday's close), it is up to the trader to maintain the minimum possible amount required to carry forward the position without facing a stop out, which is 20% in the case of Alpari. So, all the calculations need to be re-worked and funding has to be done again. Thus, it is better to stick to low leverage unless you are ready to close all your positions on Friday.

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CaptureBeta:
Use of higher leverage coupled with low margin money will cause problems in case you need to carry forward the trade to next week. Is it not? Even my broker Alparioffers a leverage of upto 1:1000 for standard and ecn accounts. However, at the end of week (Friday's close), it is up to the trader to maintain the minimum possible amount required to carry forward the position without facing a stop out, which is 20% in the case of Alpari. So, all the calculations need to be re-worked and funding has to be done again. Thus, it is better to stick to low leverage unless you are ready to close all your positions on Friday.

Your example does not go against what I typed. Low leverage means higher funding, and it means higher unsafe deposit at broker.

 

there is always a reason when the government trys to stop something like trading offshore brokers, it will never be for the traders favor, though im not from the US but trading highleverage has its perks of course, 1:200 1:500 are great for smaller accounts, currently I trade hotforex and they do not accept US traders, but Im testing another broker lmfx and i think they do allow US traders, even japan and canada, but before you jump in make sure to check first, its a testing phase for me and best of luck.

 
bingofx:
We have risk warning on broker websites notifying us we can have problems if go full lots with max leverage . Just nobody cares..

If we are going to do our trading with High leverage then the risks will remain in our trading. We should make sure that we trade in such a manner that the risks are low and we are able to grow our income in this business

 
Some brokers offer 1:1000 on micro, and 1:500 on their regular accounts, but I have seen some also offers like 1:3000 which seems bit unreal. For any trader, I suggest keeping the leverage low at first to get used to the market as higher leverage might lead to higher damages.
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