Don't Underestimate Leverage

Discussion in 'Trading' started by angelnish, Jul 19, 2012.

  1. Most beginners underestimate the potentially devastating damage leverage can wreak on their accounts. Understanding leverage enough to know when to use it and when NOT to use it is critical to your success!

    Leverage is a very powerful tool but both old and new traders use it to destroy their trading capital simply because they take its destructive force too lightly or ignore it altogether. It's a pity, but the more of them there are, the easier it is for us smart traders to make money. Sad but true.

    Always keep in mind these words from a famous superhero: With great power comes great responsibility. Or something to that effect.

    Share your opinions....
  2. hoop121


    I'm a casualty of a beginner with leverage, unfortunately. It was a very expensive education, but I'm glad I learned it while trading with 30k instead of 300k.

    Now I will rarely use it, and if I do, I will make sure not to carry too much of it over night unless I'm hedged.
  3. Leverage is what makes trading a viable activity and the rest is for newbies.