The rule of thumb is to decrease your leverage as your deposit grows. With first 20$ on my first Hotforex I used 1:500 but now when the equity turned $5000 high leverage becomes walking on a razor for me. So now acceptable leverage for me is 1:50
thats true, the higher the investment the smaller the leverage should be, just to stay on the safe side, we wouldnt want any impulsive trades with such high leverage, it will wipe out the accounts.
there used to be brokers offering 1:3000 but thats crazy in my opinion, unrealistic to be honest, and i have never traded anywhere over 1:500 even at 500 its a crazy ride seriously..
These are pushing trader to the abyss of losses. No wonder why FCA and CySEC forced those bucketshops to stop scam or leave!! I trade with tickmill, max leverage is 1:50 as they comply with FCA rules. I'm not a risk-hunter so appreciate that possible risk is capped at this level.
I guess the new traders being unaware of the market conditions should trade with low leverage otherwise higher leverage can claim high damages.
We should definitely listen to this advice, cause we can easily undermine the bad effect of high leverage.
Well high leverage is a double-edge sword, from one side it offers opportunity to make fortune (very tiny opportunity though) on other side unskilled traders always get f**ked up playing with fire.
I have realized that we cannot avoid it, all we can do is be very careful while using it so that it won't back fire.
When trading use high leverage, control emotion is very essential, and also will depending each trader will, some trader might still often reckless but if having good psychology might can more discipline using margin
I don't think emotions has got anything to do with using high leverages, because the warning has been sounded over and over again forums.