My thinking is if everyone uses low leverage then if a major market event were to happen where there is alot of slippage there would not be huge losses that people could not cover leading to a reduced risk of insolvency for Oanda. Is my thinking flawed?
Not that I really understand the new capital requirements but wouldn't the leverage clients use affect Oanda's minimum capital requirement? For the trader I'm not sure it makes much difference does it, no-one I know actually uses much more than 4 or 5 but then that's worked out from a risk perspective not a leverage one, leverage is kind of incidental.
I'm not sure what my leverage is set at officially (I never changed it from the default, when I opened my account in 2004), but the largest position I have ever had on at any one time amounted to about 6X my account value in the foreign currency. Would that be 6 to 1?
i use 50 most of the time, but i rarely hold positions for long periods of time. 10 pips is 5% on usd/jpy, don't need to hold long for big profits. if i was holding positions overnight i wouldn't go over 5:1
20:1 I use the same leverage levels I get on HotSpotfx so that trading styles will stay the same and we won't take unnecessary risks just because I have higher leverage on one vs another. But with Oanda, that leverage is misleading. At 50:1, that's the leverage you need to open a trade, but your effective leverage is 100:1 before you get a margin call. On 20:1, I still can go to 40:1 before margin call.