lost my accounts multiple times couple years back when trading AUDJPY. now back trading FX again, still couldn't get hang on how much leverage i should use. shorted EURUSD and covered in 20 minutes, with regret not to hold longer. FX is too difficult and sincere respect for all u guys who trade successfully.
Using leverage and how much you invest into a strategy or system is directly related and I feel it is very important. Some say 1:500 or 1:1000 is simply gambling. I do not agree completely. Leverage related to capital can use a rather controversial application if one really considers the possibilities honestly. Most traders gamble with leverage. But consider this valid point: You need less capital in your account at 500:1. This is what it is all about. Your yield is always based on your capital. If you trade the same way on a 50:1 account vs. a 500:1 account then which account would be better? Do you see the point? To further expound...since there is less money at risk and he gets a margin call...it's just to replenish the account. The net comparison to trading at 50:1 is the same. If he is a loser..he is still a loser...BUT if he has an edge more leverage is the way to go...Just look at the model Prop Shops offer for professional equity traders...they would not be able to extract money from the markets without leverage and fast tools. Drawing lines in the sand may be an unnecessary evil. So there are many traders here that are professional or experienced that will admonish you to be careful and to lower your expectations and do not gamble. But when you examine yourself and your use of leverage you may understand that they mean well, but do not really understand. There are a lot of things posted on these forums that "sound good"..but you can go deeper and examine these "one-liners" and discover for yourselves what they mean to YOU.
................................... try trading 1:1 and a micro lot do 500 trades keep a diary. then trade to get your " niche dialed in " not to make money. 98% blow out. if you put your head up 12 months later and you are above break even, you will have a chance at continuing. anything less is a waste of effort. and when they roll em over , make sure you puke em out. cheers, s
when real money is involved it is better to keep risks at a minimum level. high leverage is dangerous because it can affect your judgement. besides it may make you a looser even if you are in the right trading direction. for example market can go 30-40 pips up right before it goes 200 pips down...
do you trade same size all the time ? are you patient? do you feel the need to be in a trade constantly? have you a method ? do you treat your trading like a business? do you have a routine? all the answers are within discipline , discipline , discipline , discipline , discipline
M, you need to find an edge and stay with your plan. i takes years to master the game. aussie yen is not the correct pair to ramp up the curve. but when they puke 'em out for a shop full pull , stay with the plan to the exit door. cheers, s