Max Leverage Trading

Discussion in 'Forex' started by NeoRio1, Jul 30, 2008.

  1. I am not currently trading with max leverage but as i continue to have more winners than losers per week i was curious to calculate what a person could make realistically although with still a good amount of risk using 400:1 leverage.

    Of course it would be completely stupid to max leverage your entire account. If a person has confidence they can make positive percentages every week than I thought a good percentage of your account to trade max leverage in would be around 41% if you can control your wins and losses. This means if you have 1,000 with max leverage than you should have around 2500 in the account. I also think the stop should be around .001%. Whether you have 1,000 or 1 million fully leveraged if you have 6 continuous losses of .001% or more you break your account. Yes a small figure but that is where i think the stop should be at.

    Let's say with that 1,000 max leverage which is 400:1 you make 2 losing trades and 3 winning trades a week. If you stop out the losers at .001% and sell or buy back the winners at .001% then you would make $400 in one week and 20,000 anually.

    2 losers and 3 winners a week continued-
    $2,000 is $41,000 annually.
    $4,000 $83,000 annually.
    $8,000 $166,000 annually.
    $16,000 is $332,000 annually.
    $32,000 is $664,000 annually.
    $64,000 is $1,328,000 annually.

    The idea is that if you can even make the smallest percentages return per week in the forex you can make a lot of money if you can stomach the leverage.

    Any thoughts?
  2. JCVR


    Having a stop that close is nice in theory but what are the chances that you are going to catch the trade at the perfect time? Even when I'm trading for pennies things go against me a bit on the entry at times. If I got stopped out everytime this happened I would never make any money.
  3. NeoRio1, I hope you have a good system that you stay disciplined to and that you know what your historical losing streaks are. In theory, it sounds great but extremely hard to pull off at the leverage you are saying. Don't get me wrong, I am a high leverage trader myself and you must have the stomach to withstand account balance flucuations. My current system I never risk more than 7.5% of my account eventhough I may use up to 25% of the account for leverage. Tight stops are a must and a system with good probability ratios and atleast a 2.5 to 1 risk reward ratio. Good luck and I hope you find a way to make that work!

    For the record, I wouldn't recommend you use the 400:1 leverage. Trading is more about money management and the proper use of leverage than using leverage to get rich quick.
  4. If you buy successfully on the bottom then i would say the majority of the time you would not get stopped out. If the stop is too close than what about putting it at .003% and then aiming for a .003% profit each trade. The profits would be higher as well if you could be successful. What i am saying overall in this thread is that if a person has the ability to have more positive trades than negative than they should seriously think about using larger amounts of leverage with smart money management.
  5. The leverage you use is incidental, it's the % risk per trade (or series of trades) which is the important number.

    There are probably better articles and books around but this might be a start.