Leveraging your money can be a great thing, but it can also lead to excessively risky trading. Certainly using leverage in any business context is the key to large profits, but at what cost are you willing to achieve this? Are you willing to risk over 20% of your forex account balance on a single trade? If you answered yes, then what you are doing is less like trading and more like gambling, and you will find that you will quickly join the over 95% of novice traders that end up running their account balance down to a margin call. Alot of new traders fail because they don’t have no idea on how to use leverage. They will just go and open a standard account with only $300 or $500. Understanding how to use leverage is very important because it can save you from losing alot of your money. I will be listing some key points here. I’ll start with Forex Trading Accounts.
This is where all new traders should start. Starting here will help you understand how live trading is all about. Even though you might have $50,000 to play with I recommend all new traders to start with a micro account. Understand the charts and see how everything works. Get a feel on how Forex works. This is why I want all new traders to start here. How much do I recommend for a Micro Account? I recommend everyone to atleast have $750 or $1,000 to trade with micro.
It’s recommended for any traders to open a Mini Account with a minimum of at least $10,000. Theres not much to say but please don’t open a mini account with $1,000.
You can start with $10,000 but not recommended. If you want to open a standard account then please have more then $10,000 to be safe.
So I kinda went over on how not to set yourself up for failure when starting up a live trading account. I will go over more about leverage because I believe that alot of new traders don’t understand how to use it. Check back in a few couple days for Part 2
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Sounds really interesting, can’t wait to hear more.
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[...] How To Use Leverage Part 1 [...]