What leverage do you use?

Discussion in 'Forex Trading' started by chipmunk, Nov 11, 2008.

  1. I've just set up a $100,000 demo account and see I have the power to buy $10M worth of Euro/$.

    WAY too leverage for me. I think of it as "how much will I lose"

    so if you have a $100,000 what levage are you using? 2X,3X,5X? No leverage?

    Thank you
  2. I usually don't go higher than 10:1. Sometimes I may hit 20:1 but the majority of my trading is under the 10:1 level.
  3. ATLien


  4. PaulRon


    im on oanda and use 50 to 1, comes in handy on clean breaks
  5. Depends on what you are comfortable with. Start out with 10:1 and see. My personal opinion is that one should never go to 400:1 and only in exceptional circumstances do 200:1 (only when you feel you can guarantee precision)

    From 50:1 to 100:1 is what I use.
  6. Geez.....20:1,100:1,500:1

    I'll stick with 10:1 for now.

    Thank you
  7. I find that on the day or two before currency options expiration day (around the 5th-7th of each month for globex opts), I can go 500:1 or even 1000:1 pretty easily...

    ... Damn, I'm never on the right side.. Why DAMNIT Why!!?!?
  8. What do you mean currency options? I heard about currency futures but options? Is there such a thing?
  9. schizo


    Doesn't this all boil down to correctly timing your entry with a good money management to minimize potential losses? If you can perfect those two, it doesn't matter what leverage you use.

  10. Calculate risk not the leverage you use, for example....

    Account Balance: $100,000
    Risk: 2% - $2000.00

    Eur/Usd Sell @ 1.2575
    Stop Loss @ 1.2625

    $2,000 divided by your 50 pips stop loss = $40 per pip = 400,000 trade size


    Account Balance: $100,000
    Risk: 1% - $1,000.00

    Eur/Usd Sell @ 1.2575
    Stop Loss @ 1.2595

    $1000 divided by your 20 pips stop loss = $50 per pip = 500,000 trade size


    Account Balance: $100,000
    Risk: 5% - $5000.00

    Eur/Usd Sell @ 1.2575
    Stop Loss @ 1.2585

    $5000 divided by your 10 pips stop loss = $500 per pip = 5,000,000 trade size

    etc etc etc....just adjust trade size according to the risk you're prepared to take and the stop loss of the individual trade.

    Nowhere did you need to work out your leverage, it doesn't matter.
    #10     Nov 11, 2008