Registered: Feb 2011
02-19-12 04:33 PM
Lol! My goals aren't as lofty as 40 million francs. I'll settle for a few million Canadian dollars. The government can take their share in taxes, and I'll live happily ever recovering my skills on my violin, and caring for my wife, and my baby due in July.
But yes, using leverage as a way to control risk is very effective. Consider the $100,000 example again. Assume on any given trade you're willing lose 3%. So, deposit 97,000 in a savings account. Put 3,000 in a trading account and leverage it 33.33 to 1. Buying power is still $100,000, but the most you'll lose is the $3000.
Don't curse your broker's margin calls. Exploit it. Use it to your advantage.