I am going to be 18 in a few days and I have had a practice forex trading account for a few months and have been experimenting with it in terms of leverage and stop-losses so that I am prepared for the real thing. I have discovered that using the recommended stop-losses is not a good idea as far as profit is concerned for me, especially on 1:100 leverage as you lose money everytime.
I tried using 1:100 leverage on bigger stop-losses such as the size and value of my entire trading capital. I’ve won 2 times this way, but I still think its very dangerous as there is a high probability of being wiped out eventually at some point. I think that using 1:100 leverage is like gambling. I’d been using 1:25 leverage and set stop-losses of the value of all of my trading capital and was winning every time I did this without failure and was generating 10%+ profit every day.
What I’d like to know is in your opinion would I still be okay if I did what I was doing with 1:25 leverage and a much higher stop-loss, but used 1:50 leverage instead of 1:25? What would you suggest here?
To start with I wouldn’t use any leverage at all. You shouldn’t really risk any more than 2% of your capital on any one trade and no more than 6% in total at a time. Start playing with high leverage and then you could lose all of your capital very quickly.
You are also unlikely to get any margin as a novice trader with no trading history or capital to back up the risk involved in using high leverage.
You will find trading with real money is very different to using a practice account – you have no idea of the emotional rollercoaster that will put you through.
I would recommend reading The Online Trading Athlete before you do anything.
95% of investors lose money trading FX for a reason – a 10% daily return may sound great in principle, but in practice you are extremely unlikely to get that consistently, 10% per week is more realistic.
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