Leverage and Margin in Forex Trading (Podcast Episode 8)
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Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
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would you recommend using a 20:1 leveage when starting with £1000. Was bit confused on this video. I even read through your blog. correct me if im wrong but from what I understood before this video, I wouldnt of used higher than 1 lot when trading.
I still don't know how leverage works. I don't get it, can someone show me how leverage works in trading ? I mean, in a live trading, with a chart ? And how to compute our pip value with this ?
Do you risk 2 percent of you deposit or 2 percent of the total value of account including leverage ?
same, I have ADD
I'm all nerd out on this.
thanks
This Is super amazing!!!!! VP you are amazing, Thanks a million
Hey VP your concept and podcast are great! Thanks for that
EXCELLENT. IT'S A MUST WATCH.
the amount of loss is determined by the number of lots you placed and the distance of the SL to current price. i.e 0.01 or 0.1.
leverage only helps by lending money to your trading account at a higher "interest". as what VP mentioned, it allows people to put in small portion of their trading funds into the broker but still want to trade 2% (for example) of their total trading fund. 1-2% is the golden rule per trade to minimize the risk of ruin.
thanks
ESMA was cruel, ruined my plan.
How come when one opens a trade the Margin is one thing, then later the margin is increased (doubled)? I find this strange.
Much thanks VP
👍👍
Thank you VP!
I don't often comment youtube videos but heck, I'm really surprised not only by how transparent you are but also by how clear your messages are. Great combo for a forex teacher! Thanks, full support from France!
I don't often comment youtube videos but heck, I'm really surprised not only by how transparent you are but also by how clear your messages are. Great combo for a forex teacher! Thanks, full support from France!
Leverage is a strange topic. Technically, leverage itself isnt the issue. Trading big is trading big wether its your money or not. The loss is always yours to bear, always. I think for new traders the biggest reason leverage is so dangerous is because they dont truly understand it until they've lost alot of money, which is mostly because of poor risk management isnt it?
With that said. I can see how leverage in the extreme is definitely just a bad idea as an account wipeout can occur on one bad trade. But personally i feel 1:50 isnt too bad for novice retail traders, granted their money management and risk is good.
do u have portfolio?
20 to 1 means 1:200?
is 1:1000 leverage too much? my broker offers it
Hey nononsense is hugosway a good broker to use ??
Smoking a blunt listening to your podcast is lit 👌
here in my country, we cant go lower than 1:50, so 1:20 is out of question
There is no more risk because of E S M A and your account cannot become a minus where you owe the broker, you just need to have more money in your account. It will affect sales men selling useless courses because they are aimed at financially challenged dreamers.
regards
Hayden
Wow, I would have liked to know your channel when I started. btw you're content is gold bro !! Notification bell is on for the first time too
Just went and changed mine to 1:25 (it was set to 1:500 by default!).
Leverage is an odd duck concept. Most who come from the stock trading world trade 1:1 or 2:1 meaning they essentially get what they pay for. A greenback for a greenback worth of stock (or a Yen or a Pound…etc.). Period. Welcome to the wild west of 4x trading. Brokers are quite generous and offer us much higher leverage (also called gearing in some circles)…I think I saw it up to 1:1000 a few years back. US brokers use to offer high leverage until the Dodd-Frank act was enacted (decent article if you're interested:)
https://greentradertax.com/new-cftc-forex-trading-rules-call-for-501-leverage/
Salvation! There are others who are going to save us from ourselves…I'm not going to repeat what VP said in the podcast but if you listen carefully, he not only explains the "what" and "how", but more importantly, the "why". Why…meaning why you should in no way attempt to trade with high leverage. Yes, It is quite attractive to have that satchel of cash at your disposal but whatever rockets up your balance will equally torpedo it to smithereens as well. Be smart – set your leverage to 20:1 and leave it there for the time being. You can always raise it when you're consistent with your trades and you're booking constant wins.
Ex-USA traders – I see many of you posting your available leverage. Be aware that brokers would absolutely love you to take the highest leverage. What? I can make umpteen dollars/yen/pounds/euros with only the minimum required balance? Sign me up! Enter your trade (leveraged to the hilt), it goes against you a handful of pips but because you didn't understand "the why" and poof…stopped out and your account is a sad string of zeros. Eff'in sucks. Do yourself a favor…listen to the man. Reflect on what he says. You won't regret it.
I'll be honest. The ESMA ruling did me a favour . Not that i need a bunch of tossers in Brussels telling me what to do. What it did do was corral most people into the UK and Euro markets also forex. So thanks …….you tossers!
As a professional trader you can still trade with a leverage of 200:1 with most forex brokers in the EU but you have to renounce in writing to any account protection that the regulator of the country concerned offers. For example, trading in the UK, you have to renounce the account protection of GBP 50,000 offered by the Financial Services Compensation Scheme (FSCS) in the event that the firm goes bankrupt.
Could you please clarify the % risk were you mentioned $50k account @ 2% risk with 20:1 leverage then if you only want $25k exposed to the broker with 40:1 leverage but you still have a 2% risk per trade and the size of your trade does not change ? …. Is that of the $50k or the $25k ?
What does prop trader mean?