Leverage in Jeopardy - Page 3
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Thread: Leverage in Jeopardy

  1. #21
    I am able to open more places (and absorb more red pips before a margin call) w/ greater leverage.

    It WILL make a difference to some people's trading methods/styles. (Me, for one)

    Quote Originally Posted by ;
    Example:

    10.000 USD Balance
    3% Risk = 300 USD
    Pips at Risk 100 Pips.
    =gt; Lotsize 0.3 Standard Lots or 30.000 Components
    Margin Requirement with 1:25 = 30.0000/25 = 1200 USD
    Notice how that is readily possible with 10000 USD?

    Currently with 1:500 leverage it is 30.000/500 = 60 USD.
    What's the risk? 3%!! Is there a gap between
    1:500 and 1:25? NO! Why? Because the RISK is the same.

    You could also risk 20 percent on 100 Pips of your account this
    would demand 8000 USD of margin.
    Please say 20% risk per trade is not sufficient and I will laugh my ass off.
    Show...

  2. #22
    My issue is that although there may be tens or hundreds of thousands of individuals contrary to the law, which the resistance will not be arranged.

    In war, you will need direction. And it would be nice to have a well defined business fighting against this. Alas, with no egy and a few thousand petitions, I don't see it being almost as powerful.

    Quote Originally Posted by ;
    I'd say that everybody who reads this thread should be aware of the issue and wait to see if the SEC comment phase arises. At this time a severe mobilisation should take place by as many traders as possible to submit concluded, detailed arguments into the SEC against this ill thought-out rule that is . The acceptance of such a rule by one regulator could open the floodgates.

    I recall if the SEC opened a comment period regarding the Silver Users Association tips contrary to the regiion of the first silver ETF....

  3. #23
    A 10 pip loss on 1 lot is $100, regardless of what leverage you're using.

    Problem is sold with the abuse of high leverage.

    $1,000 and 500:1 leverage means you can trade 5 lots at a time. 20 pips from you and your account is now gone.

  4. #24
    Nope.... If it is 10:1 vs. 100:1, the margin requirement would be 15000 vs. $1500 to control 1 lot.

    That means you have $13500 additional red pip absorbtion dollars in the account, or the equivalent of 135 pips.

    Quote Originally Posted by ;
    A 10 pip reduction on 1 lot is $100, no matter what leverage you're using.

    Problem is sold with the misuse of high leverage.

    $1,000 and 500:1 leverage means that you can trade 5 lots at one time. 20 pips against you and your account is gone.

  5. #25
    Quote Originally Posted by ;
    Nope.... If it is 10:1 vs. 100:1, the margin requirement would be $15000 vs. $1500 to restrain 1 lot.

    That means you've got $13500 extra red pip absorbtion dollars in the account, or the equivalent of 135 pips.
    Yes that is correct, but 10 pips with 1 lot = $100 no matter what.

    I know that the risk is greater with your money backing the trade (as per your other thread, a gap against sending you into a negative balance for example).

  6. #26
    Sorry, hit submit instead of preview.

    The example you submitted td with lower leverage, is still blatant abuse of leverage.

    It's the traders responsibility to know about such risks in this particular game - i.e. gaping past your stop.

    If you traded 0.1 of a lot in an account balance of $15k, that means a 15,000 pip reduction has to occur to wash you out. I might be overlooking something, but I have never seen a difference of this magnitude.

    Abuse it, you risk losing it. Plain and simple.

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