Comments on: No leverage Forex, again. http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/ This blog goes where few traders dare - the exciting world of Forex outside the dollar! Tue, 31 Jan 2012 13:20:56 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: admin http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-13536 admin Wed, 25 Jan 2012 04:07:20 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-13536 Hi Mujeeb, Whether using leverage or not, in the end results will depend on the strategy itself. Leverage will simply magnify the gains and losses. If you use no leverage at all, you need to clear about 10,000 pips in order to double the account. That is without increasing the size of trade as the account growth. If the position size is increased every time the account registers a new high, you probably need only 6000-7000 pips to doubble the account (compounding). It depends on how often the size is hiked and by how much. Using a modest leverage of 2:1 you need make half as many pips in order to double the account. When the leverage increases to still small 5:1, you probably need to clear 1200-1500 pips for your account to double. Mike. Hi Mujeeb,

Whether using leverage or not, in the end results will depend on the strategy itself. Leverage will simply magnify the gains and losses. If you use no leverage at all, you need to clear about 10,000 pips in order to double the account. That is without increasing the size of trade as the account growth. If the position size is increased every time the account registers a new high, you probably need only 6000-7000 pips to doubble the account (compounding). It depends on how often the size is hiked and by how much. Using a modest leverage of 2:1 you need make half as many pips in order to double the account. When the leverage increases to still small 5:1, you probably need to clear 1200-1500 pips for your account to double.

Mike.

]]> By: Mujeeb http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-13531 Mujeeb Tue, 24 Jan 2012 03:53:25 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-13531 I think this post is a must read for anyone trying forex without much experience, have not seen much in this post recently. I would like to ask Mike how is his strategy of no/low leverage working, what sort of annual returns should one expect with a no leverage forex account? I have seen many managed account giving their no's all over the place, i have no plans to go with any though. Thanks Mike in aniticipation. I think this post is a must read for anyone trying forex without much experience, have not seen much in this post recently. I would like to ask Mike how is his strategy of no/low leverage working, what sort of annual returns should one expect with a no leverage forex account? I have seen many managed account giving their no’s all over the place, i have no plans to go with any though. Thanks Mike in aniticipation.

]]> By: Paul Barent http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-8699 Paul Barent Thu, 06 Jan 2011 09:54:45 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-8699 Great Post.. I had the feeling that its virtually impossible to determine the direction of a pair short term (daily). So i guess only longer term , low leverage trades make sens. Or a currency ETF perhaps? Great Post..

I had the feeling that its virtually impossible to determine the direction of a pair short term (daily). So i guess only longer term , low leverage trades make sens. Or a currency ETF perhaps?

]]> By: David http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-6883 David Fri, 10 Sep 2010 07:07:20 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-6883 Leverage is fine with a working system... If I have 100:1 then I make $10 from a 100,000 size lot with a $1,000 down payment. If I have 500:1 then I make $10 from a 100,000 size lot with a $200 down payment. Essentially, leverage - used with good managment - is actually less risky as less of your money is exposed per trade. The ugly side of leverage arises however when traders mix leverage and greed together: "Oh wow, from 100:1 to 500:1... that means I can then trade 5 times more per trade. Woot!" They are the ones who loose big and put a bad name on leverage. Frankly, people should have a choice. And those who are greedy should have to undergo assessment and / or be taught inorder for brokers to give them extra leverage. It would be certainly better than the decision CFTC has made in the US. Leverage wasn't why that person lost his money fast. He clearly wasn't using money management and stop losses. Leverage is fine with a working system… If I have 100:1 then I make $10 from a 100,000 size lot with a $1,000 down payment.

If I have 500:1 then I make $10 from a 100,000 size lot with a $200 down payment.

Essentially, leverage – used with good managment – is actually less risky as less of your money is exposed per trade.

The ugly side of leverage arises however when traders mix leverage and greed together: “Oh wow, from 100:1 to 500:1… that means I can then trade 5 times more per trade. Woot!” They are the ones who loose big and put a bad name on leverage.

Frankly, people should have a choice. And those who are greedy should have to undergo assessment and / or be taught inorder for brokers to give them extra leverage. It would be certainly better than the decision CFTC has made in the US.

Leverage wasn’t why that person lost his money fast. He clearly wasn’t using money management and stop losses.

]]> By: Truden http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-6598 Truden Fri, 30 Jul 2010 03:43:46 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-6598 Greatings, Interesante, no va a continuar con este art?culo? Have a nice day [url=http://www.affhtf.com/]Truden[/url] Greatings, Interesante, no va a continuar con este art?culo?
Have a nice day

[url=http://www.affhtf.com/]Truden[/url]

]]> By: admin http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-1965 admin Tue, 02 Jun 2009 16:17:39 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-1965 Lee, it depends on your strategy. Nobody is right all the time, so part of creating a strategy is defining conditions ( level) for admitting that you made a mistake and cutting losses. Before you enter a trade you should decide at what price market proves you incorect, a stop loss. It seems to me that maybe you should trade demo account for some time, practice, before risking any more money. You don't have to rush things, markets will still be here in a few months. Lee, it depends on your strategy. Nobody is right all the time, so part of creating a strategy is defining conditions ( level) for admitting that you made a mistake and cutting losses. Before you enter a trade you should decide at what price market proves you incorect, a stop loss. It seems to me that maybe you should trade demo account for some time, practice, before risking any more money. You don’t have to rush things, markets will still be here in a few months.

]]> By: admin http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-1964 admin Tue, 02 Jun 2009 16:08:35 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-1964 Paul, the way I see it leverage is a tool and not something either bad or good. Ultimately everybody has find own comfort level when it comes to leverage, strategy efficiency and risk tolerance. Paul, the way I see it leverage is a tool and not something either bad or good. Ultimately everybody has find own comfort level when it comes to leverage, strategy efficiency and risk tolerance.

]]> By: admin http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-1963 admin Tue, 02 Jun 2009 15:56:54 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-1963 Thomas, possibility of default could be a thing of the past soon. Within year-two we will see Forex brokers starting to offer either insurance for funds, or some kind of segregation guarantee. Pretty much the only way left to set yourself apart from other brokers. I expect these offers to start showing up soon. Thomas, possibility of default could be a thing of the past soon. Within year-two we will see Forex brokers starting to offer either insurance for funds, or some kind of segregation guarantee. Pretty much the only way left to set yourself apart from other brokers. I expect these offers to start showing up soon.

]]> By: Danielle http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-1962 Danielle Tue, 02 Jun 2009 12:46:50 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-1962 Very interesting observations. You are right - traders like leverage. The small percentage of traders prefers trading without any leverage. Good luck. Very interesting observations. You are right – traders like leverage. The small percentage of traders prefers trading without any leverage. Good luck.

]]> By: Wang Lee http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/comment-page-1/#comment-1961 Wang Lee Tue, 02 Jun 2009 12:10:30 +0000 http://fxmadness.com/2009/05/31/general/no-leverage-forex-again/#comment-1961 Dear Mike, I would like to thank you for explaining me in so much details. I really appreciate your effort. I have started trading on low leverage. I initially thought that I will hold up an open trade unless i see profits before closing the deal. On a contrary, you mentioned that at times in case of losses, its preferable to take the loss. Now, i would like to know, when is the right time to make this decision of taking the loss. In cases of loss, its quite common to feel, that the rate might change soon.. and u keep waiting for it, until you find that now its too late to take the huge losses. lee.hardware@hotmail.com Dear Mike,

I would like to thank you for explaining me in so much details. I really appreciate your effort.

I have started trading on low leverage. I initially thought that I will hold up an open trade unless i see profits before closing the deal. On a contrary, you mentioned that at times in case of losses, its preferable to take the loss. Now, i would like to know, when is the right time to make this decision of taking the loss. In cases of loss, its quite common to feel, that the rate might change soon.. and u keep waiting for it, until you find that now its too late to take the huge losses.

lee.hardware@hotmail.com

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