“The point [is] that a trader has to master their psychology to allow him or her to take many small losses, trade through drawdowns, and let winners run beyond expectations.” - Markham Gross
Some people preach against leverage because of their own faults. They use trading methodologies that ultimately make average losses that are bigger than average profits, while they should be doing the opposite. While we may find it difficult at first (the same was true of me), controlling losses and making trading decisions become very easy when they become our nature.
In order to know what leverage is in trading, plus the advantages in using it, please search for the information yourself. However, experienced traders should understand what leverage is. Leverage isn’t a bad thing- it’s irrational use of leverage that’s a bad thing.
So I recommend the use of leverage. When leverage is used with strict money management, a heartwarming balance is then found between decent profits and risk control. For example, I use a leverage of 1:100. However, I risk only 0.25% per trades: which means that I use only 0.01 lots for a $2000-account, with a stop of 50 pips per trade. With an account that’s less than $2000, I’ll recommend conversion to cents, for greater safety.
The greatest achievement in trading is controlling the treacherous statistics called drawdowns, not making profits, for profits are easy to make but difficult to retain. For example, if you made a profit of 10% in this month, you could start experiencing losses in the first and/or the second week of the next month (as it’s true of any trading approach you might adopt). A proof of your proficiency then lies in your ability to lose as little money as possible, going down by, say, 2% - 4% maximum. With this, it’s easier for you to bounce back when the strategy enters another encouraging winning streak. However, a bad trader would lose between 10% - 40% or even more, during such transitory losing streak. What’s the benefit of gaining 20% this month and losing 55% next month?
It’s a good thing to help our friends and well-wishers to be the best they can be in their trading careers – hence my articles. Directly or indirectly, we benefit when our friends and acquaintances when they become successful. If your friend doesn’t become a king, you won’t become a friend of a king.
The quote below ends this piece:
“The problem is adjusting expectations so that your psyche survives long enough for you to be around when the big winner appears. The majority of traders quit simply because expectations and reality are out of alignment.” – Chris Tate
Leverage is optional thing you can successfully control trading risks picking appropriate lot size. The more is leverage the less lot size should be to reduce risk as much as it possible.
See leverage is not bad , it could be very useful but its very necessary that you should be confident about trades where your using leverage.
Higher leverage is provided for only small account (light trading lot), consistent profit always better than large profit (larger risks). My broker Vinson Financials offer various account (leverage range from 1:200-1:500), but 1:100 is quite good for me. Don't "Sink or swim" in Forex.
Leverage is not bad, but the trick lies in how well you can utilise it, leverage is very luring and at the same time it could be very dangerous as you could loose a lot.
Leverage is good offer for trader they are able to trade in market with less amount if w do trade with no leverage we need a huge amount for this purpose. Leverage should be use wisely and carefully . My broker Mayzus offer upto 1:500 leverage it is enough for any trader that he can trade freely using this levverage or decide to use than this as I mostly use 1:100 to 1:200 leverage in trading.
MAYZUS INVESTMENT COMPANY
Hotforex offers 1:1000 on their micro and 1:500 on its regular accounts, but I have seen some crazy offers like 1:3000 which seems to be 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.
Leverage a good choice for trading depends on how much capital we use for trading.
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