Leverage is Double Edge Sword
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Thread: Leverage is Double Edge Sword

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    Super Moderator Gamer's Avatar
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    Leverage is Double Edge Sword

    All of us knows very well that leverage is the basic thing due to which we are into the Forex trading, because if there will be no leverage that is means not good trading because we need much money to open an account
    But leverage is also can work against of us , lets say we using 1:1000 or even bigger , so do you really thinks that its double edge sword or even some traders referred killer !
    What's you thinks about it

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    Super Moderator RoboForex Trader's Avatar
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    Quote Originally Posted by Gamer View Post
    All of us knows very well that leverage is the basic thing due to which we are into the Forex trading, because if there will be no leverage that is means not good trading because we need much money to open an account
    But leverage is also can work against of us , lets say we using 1:1000 or even bigger , so do you really thinks that its double edge sword or even some traders referred killer !
    What's you thinks about it
    I've never used such a high leverage, usually - 1:100 is enough for me. Traders who use the leverage more than 1:100 should always keep a capital cushion. It's necessary for case of the market collapse or panic. There are some brokers even (except RoboForex) who can cut the leverage up to 1:100, -it has happened many times in my practice.

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    Rookie martyn's Avatar
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    Leverage is a sword that can harm our own in forex trading, a lot of traders who have stopped out just as wrong in choosing leverage. Due to generate massive leverage and risk of loss will also benefit we get in forex trading. So we have to choose leverage with caution, and should we adjust well with our capital.

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    Leverage can indeed be of great use to exploit market opportunity,if properly handled, like you said leverage can be a double edge sword.it can help you and it can also destroy you.you have to either learn to handle grater risks or you avoid using leverage if you can't handle it.

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    Leverage use only good for expert traders because we know that by using high leverage we can create bigger lot at a time, if market goes in favor of our position created then it may make us rich with in a minute but if market goes against our position then it will wiped out whole of or margin with in a minute which will force you to stay out of Forex market for some time or for ever.
    SO think wisely whether you want to stay in market for long run or will try to make money over night by using high leverage where chances of loosing whole amount is their.

    Less leverage = less profit but will save your capital against big loss.

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    In Forex leverage allows me to control large sum of money with small deposit called margin.In another words, forex trader can make trades with deposits less than the full value of the position.Archimedes of Syracuse (287 B.C. - 212 B.C.), a Greek mathematician, physicist, engineer, inventor, and astronomer well spoke of using leverage..

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    I think leverage is not good for newbie trader and it is double edge sword if use it wrongly and face with loss. When we use big ratio of leverage such as 1:500, !:1000 and so on then if we can lose then it is easy we face with margin call. I think we should not take leverage benefit until we become a expert trader who know Forex trading well.

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    (212BC-287BC) a Greek to me, in other words leverage in Forex, Forex traders with deposits of less than the full value of Syracuse's position. Archimedes margin.In business can be called to control a bigger sum of money with a small deposit, mathematician, physicis , engineer, inventor and astronomer who spoke good use of leverage.

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    i guess there is advantages and disadvantages from it, and all back to us how to set it, then we just need to set it based on the needs and of course there is consequences from it , leverage is useful for traders to get enough margin and sustain their trading forex and i guess the mistakes and loses was not caused by leverage but it was caused by the trader itself. how good they did trading ?

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    yes i agree that leverage is a double edge sword. it is just like a sweet poison. it is has many advantages and disadvantages. by selecting low leverage it means low profit and less risk. i recommended the low leverage for beginners because by this they will stay at market for a long period and if some on like high leverage then Forex becomes a gamble.

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