I have seen a couple of studies that claimed that was the ideal range. Here is one that's worth looking at: http://ddnum.com/articles/leveragedETFs.php
Taking a leverage is much more depended on trader's mind, we can suggest one according to our knowledge but we can not force them to follow our principles of trading.
Leverage boosts up the trading amount. Higher the amount-higher are the chances to make profit, but there are always two sides of a coin. High leverage brings along high probability of risk which can affect the trading strategy adversely. So as per me ideal leverage should be between 50x to 100x.
Very true, opting for a desired amount of leverage is individual’s own choice. However, one must understand before, the concept of leverage and what all pros and cons are attached to it, then only decide the amount of leverage. Usually more professional traders prefer to trade at 100x leverage.
Every trader who is working right now in market is going to choose the leverage which is good according to their trading style. So there is no need to find best one among so many options.
Leverage should ideally be volatility dependent, which is time frame dependent. So the key inputs to determine leverage are: 1) maximum capital at risk 2) volatility measure Here's an example (assuming only trading 1 position at a time): . risking maximum 1% of account per trade . $100k account . means risking max $1000 per trade . lets say we are trading EURUSD . lets say we use the 60min chart . lets say we pick the 20EMA ATR as volatility measure, currently at 0.0016, . and lets say we use as stop such ATR x3 . that translates into 48 pips stop . which translates into $480 stop for every EUR 100,000 trade. . then $1000 / $480 = 2.08 . thus under this approach one should trade EUR 208,000 on a EURUSD trade . which would represent leverage of 2.08 * 1.1186 = 2.33 My ideal leverage is in the 1:1-5:1 range. Think about finding your ideal leverage going through an analysis similar to the one presented above. Cheers
I don't know if it makes sense to create a $20 bucks account and try to trade with 1:2000? What would you say? I haven't started yet, but thinking of that and have already deposited 20 bucks.
$20? That is the really small amount. You should first this combination with a demo account to test your strategy with the market. Then go for real one.
I think that the new traders being unaware of the market conditions should keep the leverage low in start as high leverage can claim higher damages too.