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How to Choose the Right Leverage in FOREX TRADINGX Trading


rony

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Leverage is one of the hallmarks of FOREX trading. Because the fluctuations between currencies are relatively small in the short term, FOREX traders must use leverage to generate reasonable profits. Most FOREX brokers offer different leverage ratios to choose from when trading. Each trader must choose the right amount of leverage to use based on their personal objectives.

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I think this is a very good question and the answer to it is simple. I use high leverage when my deposit is small and lower leverage when my deposit is big. while scalping I use more leverage and keep my deposit low. when you take more risk and expect high returns keep the leverage more but the deposit small.

 

With small deposit of about 50 $ or 100 $ and high leverage of about 1.1000 or even more and using scalping we can do wonders. However in news driven trading leverage should not exceed 1.200 and the deposit should be more in order to draw consistent returns from Forex.

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the best way to determine the appropriate leverage in forex trading should we look at the amount of capital we have first and we also look at the ability we have so that we can determine what we will use leverage in forex trading, if we only have a limited capital then we should use the leverage 1:1000

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Choosing the right leverage is an art. I chose more leverage when the market is sideways and gives an opportunity to do scalping. Lower leverage is advisable in news drive trading. The common sense is that we should keep high leverage when the investment is low and we want to multiply it by taking higher risk.

 

However When the investment is large and we cannot take high risk we should keep the leverage low and earn good returns on our capital.

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I get along with some ad parties taichinhviet.vn should just living in it. Beside which these your standard post bond spreads. Discussion is also quite exciting.In the newly created account the Clause 3 weeks should still many things to learn! Verdict wrong then withdraw his experience.

So when you see it uptrend should not sell that should farming retrace buy is safe?

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Well, we can see here, we have to be really careful to make the decision about the leverage here. Because the leverage is talking more about the chance for us to trade on forex trading. About how many chance we can have and we can do on our account here. This is very important thing to know

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Yeah, every broker offers different leverage for their trader. And in instaforex, i can get leverage up to 1:1000. And we must be wise in choosing leverage to trade, so as not to endanger our account. And big or small leverage that we use, we must discipline when trading.

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I usually prefer to have 1:500 or 1:1000 in the leverage. Since, I don't usually have huge trading capital so, to use all of the capital is to have higher leverage and to have also more equity for our trades. There's no really have right leverage because, it will always depends on the trader's choice which they will think is appropriate in their trading strategy and style.

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Choosing the right leverage is very important. Leverage can not only increase our profits but also the chances to lose our capital. I prefer using higher leverage when scalping and lower leverage while doing news based trading. when we increase the leverage its prudent to keep the deposit low.

 

Yeah, and we have to be wise when choosing leverage, because because leverage can be a weapon that could endanger our account. High leverage, high risk.

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  • 7 months later...

Choose low number of leverage at first as a newbie to avoid large losses. Its recommended that you use low leverage so you don't waste a lot of money cause you will lose as a new trader. Once you gain more, you can use more leverage. Its risky since you can face margin call and lose all of your deposit so I would go easy on it and also trade at the most profitable trends so you don't lose it. 

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  • 3 months later...

Leverage is the reason even poor people can trade in Forex. For a trader to be make it through even with his small capital, then he needs to increase his leverage. But then, high leverage can quite be dangerous as the trader is exposing his account to more risks with a high leverage.

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According to what I think we can choose the right leverage in forex trading quite easily for us, if we have a big capital to invest in our trading then perhaps we should not go for high leverage but do trading with setting up a bit lower leverage which would reduce risk for us and give reasonable profits in the end and if we have small amount to invest then we should use a little higher leverage.

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leverage is like double edge sword. in one site, help traders to manage small account into high in short period of time, but in other side, help traders to get fast deduction in capital if they are always get loss result. use the leverage as our advantage surely difficult. because it mean we should have good trading skills and knowledge.

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On other hand choosing leverage also depends on the trader, if it a newbie trading then I think he should probably go for a bit lower leverage, if an expert is trading and he has analyzed the trading market well he might or can go for choosing higher leverage according to his analysis as well.

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  • 2 weeks later...

@surya, quite right. A trader should realize how well he is when it comes to trading. He should also understand the need to trade according to the level of skills he has. It wouldn't be wrong to assume that high leverage is for those who has some good trading skills and are always ready to manage their risks well.

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minimal lot value is around 1 to 10 cent if traders choose to use 1:100 leverage ratio. that is safe ratio when traders start trading with small capital. however, though traders use high capital to trading, they are not necessary to choose to use high leverage ratio since traders can increase the lot size volume though use small or standard leverage ratio.

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Well if you woud like to know my personal opinion I would just say that go with low leverage if you have high investment and go with a bit higher leverage when you have normal/low investment, in first case a leverage of 1:50 would be alright while in second 1:100 would suit I think.

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