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LEVERAGE

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Russell Bagby
719
Russell Bagby 2015.03.05 02:47 

So I have 1:100 leverage and I average 25% equity drawdown

 does that mean with 1:200 leverage I would have 50% equity drawdown?

 

because I am learning. 

Pankaj D Costa
2738
Pankaj D Costa 2015.03.05 05:18  
19313:

So I have 1:100 leverage and I average 25% equity drawdown

 does that mean with 1:200 leverage I would have 50% equity drawdown?

 

because I am learning. 

Hi, leverage as a margin loan, this is not impact on equity draw down, its use for your trade volume margin.

Ex: you have 100$ equity / balance, your account leverage 1:100. So, you are able to trade 0.10 maximum volume in your account.

But if you have 1:500 leverage, you can trade maximum 0.50 volume. So, leverage working as a margin loan.

Remember one thing, maximum leverage means maximum risk for your account.

Thanks. 

Stuart Browne
5817
Stuart Browne 2015.03.05 07:46  
19313:

So I have 1:100 leverage and I average 25% equity drawdown

 does that mean with 1:200 leverage I would have 50% equity drawdown?

 

because I am learning. 

1 lot moving 1 pip is the same $ value, regardless of leverage. As long as your position size remains the same, and your account balance is the same, a $250 loss on a $1000 account is always going to be 25%
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