Does anyone have any suggestions on a leverage limit?

Many FOREX brokers allow up to 200:1 leverage. My trading strategy is to take just very small gains (3 or 4 pips at a time) and set the stop losses way out there just to avoid a total wipeout. I never trade on Fridays either and of course close out before the market closes.

Because of the giant stop losses, I am only comfortable with around 20:1 leverage or maybe 30:1.

In other words, with a $500 margin account balance, I would only consider buying 0.1 lots of EURUSD (10,000) at a time; 0.2 lots with $700; 0.3 lots with $1100 and so on…

Does anyone out there use the same strategy as me and feel comfortable with higher leverage like 40:1, 50:1 or even higher?

As you indicated, it is not just your leverage that you need to take into account…it is also your margin level that is important.

When I am drawn back to my technical analysis days I usually use a leverage of 40:1 unless I have a high probability setup occurring (based on pivot points and fibs). In that case I might go as high as 100:1.

Currently the majority of my Forex activity is based on conservative hedge trades (usually hedging the EUR/USD and USD/CHF). With my hedge trades I use a leverage of 400:1 and a margin of 10%. Hedging is awesome because the position can make profit regardless if the market goes up or down. I also get paid a daily interest payment, 7 days a week.

I have an analysis of the daily performance of 5 different hedge strategies over the past 500 days if you would like to see it. And these were all at 400:1 leverage and never anywhere near a margin call.

Paul

Has any one used this software and made consistent profit from currency trading?

Never used it myself, but you can look for reviews about it on reviews websites like http://www.forextopten.com/ .

I am looking for some legal Forex Trading companies to open account with. There are so many fraud companies in this field which are working without registration and loots the public money.. Also I want to know which is the authority giving regestration for these companies where the list of these regestered companies are published. Any body please help me out!

Great question and great timing.

Although there is no official regulatory agency that has hold of the reigns of the "spot Forex" marketplace the NFA (National Futures Association) has regulatory responsibility for the "Forex futures" market. Since the "spot Forex" market is currently resembling the wild west with some questionable players popping up every day a number of Forex brokers are establishing processes so as to be "compliant with NFA policies and regulations".

There are current rumors that the NFA will soon require a certain level of financial stability and available funds so that brokers are able to support their operations during irregular markets. Currently a broker can simply close up shop and sail into the sunset with whatever money they can.

A Forex colleague of mine has shared with us a government report indicating the financial stability of 170 Forex brokerages. The consensous seems to be that the NFA will require $5M in available funds within the next couple of months and up to $9M by the end of the year.

Send me your email address and I would be happy to share this report with you and you can see where your broker stands.

Paul

are they the same for daily, weekly and monthly frames? if not how do they differ.

No. You will have to redraw trendlines, support, resistance lines for different time frames. Different time frames have different technical implications. You will know what I mean if you take a look at say a 4hrly chart, a daily chart, and a monthly chart. Find the support or resistance for each. You will find they yield different figures.

If you are not using any charting software or system, use FXCM free charts. They are pretty good.

For more info on Forex visit :
http://www.geocities.com/lcming/ForexForex or

http://www.geocities.com/lcming/Forexbooks

Technical Signals :

http://www.geocities.com/lcming/Forexsignals

Oanda is decent.

Right here:

http://www.forex-trading-book.com/

Click on books in the right hand column to see the list.
There are also articles to learn more about trading.

Hi all, a few days later while i was surfing the net i found a free forex trading strategy,the strategy is to set on 1hr chart 3EMA indicators one with a white color the others with red and blue colors.
in addition we set the MACD and stochastic indicators.
un fortunally i do not remember the indicators settings,so any one know this strategy or a reference to it,please inform me.

Thanks for your help.

Very high risky

If I wanted to set up a sole proprietorship company for my day-trading/investing in the stock market/forex…

Can I write off all of the stuff I would need (a % of utilities, courses, new computer to trade with, etc) as business expenses and claim the investment revenue as Capital Gains so that 50% of it is automatically tax free right off the top, or would I have to declare it as business revenue and pay based on the full amount?

If I can't offset expenses as a company but claim the earnings as capital gains then it probably isn't worth it, right?

Whether your day trading/investing as "sole proprietorship vs individual" is the same for tax purposes, i.e., reporting the transactions on your personal tax return (T1 return), rather than in a corporation tax return (T2 return).

If you are serious in your day trading business (proven stock knowlege, # of trading transactions daily and time involved), and if your trading has a reasonable expectation of profit (making money), you may deduct a reasonable share of expenses mentioned by you. However, that means you have to report the gain 100%, not 50%.

On the other hand, if the CRA considers that your day trading has no reasonable expectation of profit, it may deny all your "business" expenses.

Capital gains are generallly for stock investments with a buy and hold strategy, rather than for day traders who flips their stocks daily or within a short time (known as "adventure in the nature of trade" in taxation). Under the capital gain scenario, you may deduct your interest or margin charges for the stock purchases.

I have about $2000 and I have never traded in any way before.Thanks in advance

Ok,I suggest nice automated forex software,which automatically stops on loss and proceeds on profits,Now i am using this automated software daily i work as 1 hr and earning More than i want.If you want this golden duck then see my blog.