Best Forex Leverage for Beginners

Discussion in 'Forex' started by Paul Sachin, Feb 23, 2022.

  1. Greeting folks, any good ideas out there on how to choose the best Forex Leverage for Beginners?

    From what I've learned, choosing a lower level of leverage, like 1:10 or 1:50, will be the most appropriate for beginner traders. And if you like to trade with a balance of $100, you can start with a leverage level of 1:100, as many professional traders recommend this leverage ratio.

    Any further ideas?
  2. 0
    Nobert and Snuskpelle like this.
  3. 1:100 => go broke if you by chance 10x-100x your account using this (in all likelihood you will simply hit zero soon though), retain same leverage, and then lose a couple of hundred percent on a gap and now owe your broker reasonably big money.

    1:10 for forex is reasonably "safe" (unless you trade something super volatile like TRY) in that at least you won't owe your broker when shit really hits the fan.

    People who trade with $100 accounts are usually not accomplished traders, value their advice accordingly...
    Paul Sachin and Nobert like this.
  4. Nobert


    Ofcourse they do.

    This is how they're making their income. By newbs blowing out.

    Zero leverage for anyone new. Zero shorts or options. No CFD's, CDO's(irony), NFT's or ICO's.
    (Edit: forgot the name of last coin type that you can ,,swap")
    Until one knows better.
    Last edited: Feb 23, 2022
    Paul Sachin likes this.
  5. Regardless of how attractive leverage may seem, you should always keep in mind that excessive leverage can wipe out your entire starting capital in a matter of seconds. Leverage is directly related to the equity of your forex trading account.

    Let’s assume you are trading a currency pair with $100 and you are not using leverage. You can achieve the following results:

    • With an increase of $10, you get a profit of $10.
    • If the trade falls by $10, you will suffer a loss of $10.
    When you apply 1:100 leverage, you get different results:

    • With an increase of $10, you get a profit of $100.
    • If the trade falls by $10, you will suffer a loss of $100.
    The greater your leverage, the more volatile your account equity will be. Likewise, lesser leverage means less volatile your account equity will be.
  6. I said it times and times again: I know many FXers that trade without leverage since SNB event in 2015. If you think you are smarter then them go ahead. They were around before you and will survive you for sure.
  7. Beginners should use lower leverage in forex. The lower the leverage, the risk involved in it is also lower, and I suggest leverage of 30:1.
  8. Dr_Trade


    Agree, never hunt for bigger leverages being a beginner. Tho, it looks more lucrative and can give you a bigger returns but at the same time if forex moves against your trades, in a blink of eyes it can blow up your capital.
    Paul Sachin likes this.
  9. kroxobor


    Choose 1:500 and then use lot size to adjust risk it's much more flexible since for every trade you can pick the lot size you need, while to change leverage you should request your broker to do that (at least in case of my broker Hotforex)
  10. pixel


    Leverage is a double-edged sword. So, it should be used wisely.
    #10     Feb 25, 2022
    Dr_Trade likes this.