Hey, I know some people trade with X400 leverage, can it still be called trading? While most traders can tell you their prediction if the USD/EUR will reach 1.5 or 1.3 in the upcoming weeks, I believe no trader can tell if during the process and fluctuations it won't drop 1/400 ( 0.0025% ) and close your positions due to full stop loss. I think there is absolutely no way to present that as analytical trading with such leverage, and that it turns trading into a game. I'd love if someone that trades with X400 could explain the reason behind it to me. Thanks, Alex
Forex trading, yes, it is a game especially with those "brokers" that offer you 400:1 leverage. True currency traders work with little more than 10-20x leverage.
You're not going to make money with any leverage more than 40x, even then it's tough. I am on 30x, and don't get stopped out by my broker automatically, and make a good amount of money. If I was working with a 100x, 200x, or even 400x leveraged account, I'm sure I'd be wiped out within the first few days. The brokers advertising 100x+ probably aren't great and you should go with someone more reliable with leverage around 20-40x.
You might be correct for position and swing trading where the pip moves are bigger. I know I certainly don't get anywhere close to even 50:1 (my broker's max) when trading in those timeframes. I can imagine scalpers and the like, though, can gear up at higher ratios given the smaller moves they are dealing with.
The only shops that offer you leverage that high are the bucket shops, and they don't allow you to scalp high frequency. They can't, because they can't offset your trades. Trading with leverage that high can only have one outcome.
Remember, just because you have the ability to trade 400x1 on an account doesn't mean you have to. You could have that capability and only trade 10x1, which is still enough leverage to make (or lose) a lot of money.
Its not leverage that matters - but account size risked. Increased gearing just gives the successful trader MORE OPPORTUNITY for profit. IOW, less money invested in any given trade. Since most newbies abuse leverage, it gets a bad name. The reality -- most newbies are poor at risk management.
This is what I got from dbFX live support, one can hardly accuse Deusche Bank of not being a serious Forex platform provider: it is indeed not recommended by them, but they offer it...
Perhaps, don't hold your breath... if I have to choose between listening to you or deustche bank, I think I'll go with one of the world's lagest banks - instead of some forum user who thinks he's a wise guy. but that's just me...