I fail to see the difference between 400:1 and 2:1

Discussion in 'Forex' started by Propaganda, May 10, 2009.

  1. Hi all,

    Ok, on many forums I see many posters state 400:1 leverage is trading career suicide.

    Why is this?

    My assumption is that 400:1 leverage destroys the undisciplined traders and the newbies because they go for the big trade and get their account eaten up by a simple few pip swing in the opposite direction.

    But, with an account balance of 10K, with proper money management, is there still a difference of trading a 10k lot at 400:1 (margin $25) vs. a 10k lot at 2:1 (margin $5000) with a stoploss at say 20 pips and a target at 20 pips.... The resulting loss or profit will remain the same amount of dollars no matter what the choosen leverage is... since the account balance is the same either leveraged account, lot size consistant, can loose the same amount of pips before blowup.

    So, do posters advise to stay away from 400:1 because it temps newbies at big profits for little investment at a extreme greater risk??


  2. new traders will destroy themselves with high leverage because they think they know

    and they do not know

    Successful traders like me on the other hand do like leverage such as the one Mirus Futures offer 500 per contract.

    Successful trader uses high leverage to maximize profit within established risk parameters

    Gun in the hand of a cop doing his duty is good

    Gun in hands of a child playing is bad
  3. Anyone who writes this is a 1-lot dreamer who is in the process of losing his $3500 account trading the ES.

  4. How do you guarantee

    With what do you guarantee

    Based on what do you guarantee

    What is your sample size

    Do you have an edge in predicting who is a successful trader on ET

    thanks for a laugh friend :D