Business and Finance

The Difference Of Leverage Approach Between New And Professional Traders

You don’t need to do research to find out that the amount of capital in one trade can affect the value of your profit. Based on trading records obtained from large brokers, it appears that traders enter the market hoping not to lose. Since many small traders lack experience in trading, they tend to expose their accounts with high leverage to a significant level. As a result, increased leverage can attract losses to the trading account you have. Furthermore, new traders often become prey to shady brokers that give them high leverage without warnings. That’s why, if you want to find brokers that are better than them, you can visit http://www.cnie.org/highleverage/high-leverage-mt4-brokers.html to find high leverage brokers who work in a fair way with their traders.

Sometimes it becomes emotional. Then the trader then decides to withdraw from trading or instead chooses to continue trading with large amounts of leverage. It could be that this is a dangerous cycle that will undermine the enthusiasm for interest in forex.

It doesn’t matter how good or how bad a strategy is, the decision to take leverage has a strong and direct effect on the results of your trades. There is a kind of publication of the trial results of the same strategy using different leverages.

It is highly recommended to open trades using small leverage, from 1:10 or less. Traders will never know when market conditions will change, which often results in trading strategies failing.

That is why always keep your leverage level at a very conservative level as well as use stop-losses in all trades. One example is using a leverage of 1:10, meaning that if you have a capital of USD 10,000 in your account, you should never open trades exceeding USD 100,000 regardless of the conditions.

The exact amount of leverage to be used is entirely up to the trader himself. Some traders claim to feel more comfortable when using small leverage, for example, 1: 5 or 1: 3. Far different from new traders who actually take as much leverage as possible. Professional traders mostly focus on how much money is at risk, rather than keep focusing on how much capital is needed to make a profit. Professionals always believe in the trading approach they choose but are always conservative about the leverage they take.

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