I trade through spreadbetting so my money calculations are simple. Contracts mean nothing to me I'm afraid and I've no idea what 64x leverage means for management of the trade. When I open the first trade, say in oil, I set a stop-loss behind the entry price which will get me out for a set % loss from my account capital. Many people use 2% so let's say its 2%. On a £10k account that would mean a £200 loss. I'd be very comfortable with that. As I haven't ever used contracts I don't know how different your process would be from mine. Are we maybe talking about different types of capital lost? I am only interested in account capital lost. So every trade on which I am stopped loses £200. But if I have 7 overlaid trades on oil, only the latest one's £200 loss is from account capital, the others' losses are from unrealised gains. On 7 trades that represents a potential total loss of £1400 obviously, but the gains from the earlier trades more than match this so I don't worry about that, the net result is considerably more profit than holding the original trade alone over the same price action.
How about if there was a flash crash, the price goes through your stop loss (on your 7 trades) and the 1st price your SB firm gives you is 10% away, but because you have so much leverage, it means 70% loss?
This is something I have put up before but its a fair (and important) question. Yes, such a severe crash through my stop on the 7 overlaid positions would be a serious loss but it would not be not 70%. Assuming I started the 7 trades with a first trade at 5000, with a stop 100 lower at 4900, and a buy order on Trade 2 at 5100. The 7th trade would open at 5600 and stops on all the 7 trades would be at 5500. The price that would be 10% in capital terms below 5500 would be 5000 - i.e. 5 steps of 100 at 2% capital loss each. So the 7 trades close at 5000. At this price Trade 1 breaks even, T2 loses 2%, T3 loses 4%, T4 loses 6%, T5 loses 8%, T6 loses 10% and T7 loses 12%. Total losses are 42%. A 42% loss is very bad but its not as bad as 70%. Nevertheless, in the event of a crash, all the eggs are admittedly in one basket. But its a toss-up as to how to prepare for the next crash - take less risk or make more money to pay for the risk. Each to their own answer on this I guess, but as crashes are less common than trends, I know my choice. Happy trading.