leverage when using EAs

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Hi! Im new at forex and Im studying a lot. Recently I was running a backtest with an EA that I bought and noticed that it gave me same profit using a 1:100 and a 1:500 leverage. Of course, thats because the trade size was the same, but something that was interesting for me is that, when testing with 1:500 leverage the margin level reached 3,000% and when testing with 1:100 the margin level reached 600%. If Im not mistaken, the bigger the margin level the better right? so how come Im getting "safer" results with higher leverage when in reality it involves a lot of risk? 
 
Leo Cuéllar:  with higher leverage when in reality it involves a lot of risk? 

Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin and leverage. No SL means you have infinite risk. Never risk more than a small percentage of your trading funds, certainly less than 2% per trade, 6% total.

  1. You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.

  2. AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)

  3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
              MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum 2017.10.10
              Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum 2018.02.11
              Lot value calculation off by a factor of 100 - MQL5 programming forum 2019.07.19

  4. You must normalize lots properly and check against min and max.

  5. You must also check FreeMargin to avoid stop out

Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.

 
Leo Cuéllar:
Hi! Im new at forex and Im studying a lot. Recently I was running a backtest with an EA that I bought and noticed that it gave me same profit using a 1:100 and a 1:500 leverage. Of course, thats because the trade size was the same, but something that was interesting for me is that, when testing with 1:500 leverage the margin level reached 3,000% and when testing with 1:100 the margin level reached 600%. If Im not mistaken, the bigger the margin level the better right? so how come Im getting "safer" results with higher leverage when in reality it involves a lot of risk? 

Hello Leo .

In simple terms ,for a hypothetical position worth 10000$ you pay less with a leverage of 1:500 than 1:100 

5 times less that is.

Im not going to mention risk ,thats another discussion.

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