Could you guys share the usual leverage you often use? and share your opinion about the ideal leverage?
The ideal leverage is up to the sky. However your system has to be perfect. I myself risk 5% MAX (2.5% AVG) per trade. Please check the Kelly Criterion for Optimal Leverage. It assumes dynamic & significant knowledge of your own E(x). Otherwise run Monte Carlo simulations. It's up to your risk tolerance too. Because Kelly & Monte Carlo or not. Risk of Ruin's always latent & Losses inevitable.
Amount of knowledge = possible amount of leverage. But regardless, unless you have well back tested Trading Plan=Don't Trade IF you love your family, your Trading Plan comes second as a means to support your family. Don't do foolish plays that would put your family as a hostage of one's laziness. Trading Business is 99% back testing and 1% trading.
However for some discretionary traders that 1% is a deep and complex universe in itself. I agree that Research & Development is the trading's core. The cornerstone. Leverage is part of the R&D process and is a whole topic on it's own. It overlaps between Risk & Opportunity (Greed & Fear). A fascinatin' subject. Luckily there ain't no ideal ! Leverage is like the intersection btw ... Good & Evil .......... XD Thing to remember: The more Risk(s) you're exposed to, The less Leverage you use. First one need an advantage. Then magnifies it with leverage.
Considering I manually trade 75 minutes a day due to so much is automated now, PC's are back testing/optimizing usually ten plus hours a day, and for me weekends I am doing something and markets are closed. And I consider the few years of very limited trading and almost every waking moment either learning to program or back testing. I didn't learn to program for anything other than Business of trading, and nor do I use it for anything else. Unless you watching some trade for entire day and you required to watch, I don't see this as trading. But we all have different definitions, right? I think at certain point of doing this Business, Greed and Fear not taken into consideration at all, at least mine it has become possibilities and probabilities, numbers game, trade what probabilities says. I think Life is risky, so be that as it may, I have to use "insurance" of some kind to control part of risk. I never thought in the my beginning I would be spending much of my time now on risk management. It is like first they made cars with standards, then air bags in the dash, now in the doors, pretty soon will be roofs, it will become like you totally engulfed in bubblewrap. But it does saves lives.
Ideal leverage is dictated by the market, your trading plan, your ability to follow it, how much you can lose and how many times it affords you to lose. "Stop loss" is actually an uncertain "loss guarantee", so everything follows from there plus slippage.
Ideal leverage for buying and holding the S&P is approximately 1.7x-2x. It all depends on your time frame and trading edge.
Really depends on your system, capital, and temperament. As an experienced trader, I don't like big draw downs, but I also hate leaving money on the table. I use about 5:1 leverage of my available 10:1 prop leverage. Temperament (and experience) is holding me back, but I am working on upping my leverage.
I have no idea what Leverage truly is. I mean i Know what the word means in the dictionary, but in regards to trading...or how it works in trading specifically technically, not so much. -- and quite frankly, I don't want or care to know. All I know in options trading, as a result of leverage...you get much more magnified returns and on the flipside...losses as well. Don't think so much about Leverage, per se...but more on your underlying skill in trading or handling or predicting the market