What is their relationship?
Why do people say leverage can multiply your profit/losses?
I always thought I use my balance to support my trade. Does leverage makes a big difference?
Never to late to understand it. Of course it makes a huge difference. If there was no leverage (1:1) you would need at least 100,000 € in your account to trade a standard lot of EURUSD.
For the details please do some researches, there are plenty resources about that on this site or Internet.
Never to late to understand it. Of course it makes a huge difference. If there was no leverage (1:1) you would need at least 100,000 € in your account to trade a standard lot of EURUSD.
For the details please do some researches, there are plenty resources about that on this site or Internet.
The Pip Value is irrespective of the leverage and is not affected by it.
When accessing your Risk you actually have to calculate both of them to manage your risk.
In my own code I calculate the maximum position size on both a Maximum %Risk (for the Stop Size) and Maximum %Margin (for the Margin Requirements) parameters.
I then selected the smaller of the two calculated positions sizes so that both limits are met. That way, the position size will be properly calculated irrespective of what Leverage is in effect.
The Pip Value is irrespective of the leverage and is not affected by it.
When accessing your Risk you actually have to calculate both of them to manage your risk.
In my own code I calculate the maximum position size on both a Maximum %Risk (for the Stop Size) and Maximum %Margin (for the Margin Requirements) parameters.
I then selected the smaller of the two calculated positions sizes so that both limits are met. That way, the position size will be properly calculated irrespective of what Leverage is in effect.
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What is their relationship?
Why do people say leverage can multiply your profit/losses?
I always thought I use my balance to support my trade. Does leverage makes a big difference?