Hey there....
I've been reading numerous posts on here, especially the ones by Dialist and noticed that generally most of the traders out there think that high leverage is "evil".
Dialist, in your response to one of our friends here, eastmaels (10-7-05 post) you listed 7 rules that you follow when it comes to trading. Rule #7 was about leverage. You mentioned that you used 20:1 leverage and that it was "insanity". I've also read "Bird Watching In Lion Country" where the author also states the dangers of high leverage.
My question is this:
I've always thought that Forex was known for its high leverage and for the ability to control a lot with little. I currently use CMS FX demo where they offer leverage up to 200:1. So theoretically, I can trade 200K lots with just $1000, making every move worth $20 on EUR/USD.
If I am leveraged 1:1, what will each move be? For me to make $10 a move, I would have to put in $100,000, right? If that is true, then I just don't see how this would be profitable in the long run.
Please explain this to me because I am surely not getting something.
Thanks!
-Roman
I've been reading numerous posts on here, especially the ones by Dialist and noticed that generally most of the traders out there think that high leverage is "evil".
Dialist, in your response to one of our friends here, eastmaels (10-7-05 post) you listed 7 rules that you follow when it comes to trading. Rule #7 was about leverage. You mentioned that you used 20:1 leverage and that it was "insanity". I've also read "Bird Watching In Lion Country" where the author also states the dangers of high leverage.
My question is this:
I've always thought that Forex was known for its high leverage and for the ability to control a lot with little. I currently use CMS FX demo where they offer leverage up to 200:1. So theoretically, I can trade 200K lots with just $1000, making every move worth $20 on EUR/USD.
If I am leveraged 1:1, what will each move be? For me to make $10 a move, I would have to put in $100,000, right? If that is true, then I just don't see how this would be profitable in the long run.
Please explain this to me because I am surely not getting something.
Thanks!
-Roman
~If you fail to plan, you plan to fail~