Topic: Trading Leverage - page 5. (Read 926 times)

Yes, it's not. But there are risk takers that wanted to do it because they think that it's going to be helpful to them and will make them rich quickly. They don't know how many times those successful traders on it have done and took a lot of losses before they're able to make it.
It sounds easy and chill but to be honest, it's not really ideal for everyone and only a few should do it. But hey, everyone has got money to trade so no one is going to stop them until they realize that it is not for them.

Trading with leverage is never an ideal one for those traders who want to avoid trading at high risks. It’s still best to trade at your own risk, without putting so much stress and pressures in your own trades. However, while this one gets avoided by regular traders, still there are those who manage to trade using leverage in trading. That’s because there is always an advantage for those who are obviously good traders, as they can certainly increase their potentials to make huge, satisfying profits.

I have been avoiding trading in futures and have never done leverage anymore. I don't feel that I can do it and it's just best for me to stay in the spot and I am more free to move with it. Compared in doing futures, you need to be active at most times. You'll be surprised by the market's motion and you're not prepared when it suddenly falls down or it suddenly gotten up and it's the opposite on how you leverage your trade and no doubt you'd be liquidated with that.

One thing I know about using leverage in trading from the ones I have seen is that, it acts as an amplifier for any loss or profit made while using it as a method to trade with.

It isn't an advised method for newbie traders to use, because it could mess up their minds emotionally when they make losses and that's a multiple of the amount they initially locked in to trade.

For those who have some experience trading already, am sure you are aware that there's a recommended leverage for the amount in ones account to be traded with, and for an  Account with about $10 - $50 in it, the recommended Leverage to use would be about 1:100 or lower.
Also, an account having about $100 - $200 will have to follow a recommended Leverage in the ratio 1:200 or lower still.

The risk is as high as the reward while using leverage in trading and it's not advised to use borrowed funds or money intended for good use to trade leverage, because any loss might be hard to recover from.

I think the reality is that Leverage is done by people who do not understand the risk that is involved a lot, and that is why a lot of people are fully against it. There aren't that many things in the investment world where you can lose 100% of your investment, sure there could be some drops, like for example if you had bitcoin in the past month, you had a drop right? But not 100%, whereas in leverage trading you could lose 100% of your investment and that is what people are fearing right now as well.

That is why I understand that it may not feel like something you could do without much trouble. I personally believe that the best thing we could do with this would be avoiding Leverage, because that is the simplest solution.

I dis agree with you, you can't totally put out leverage just like that, leverage isn't bad in it's totallity and cannot be seen as such but over leveraging is what actually turns to be a bad way of trading, do you know without leverage you cannot be able to trade as a retail trader, it's because of the leverage offered you by the broker you are able to trade your small $50 account and move it to $100 and above , if there were no leverage you will need much more than that to be able to trade the market which i know as a retail trader you may not be able to have that much and willing to risk it all on a single trade, because if you loose such trade then all your funds will be gone but when you bare leveraging you will be able to maintain some balance even after loosing a trade or two.

Understanding the concept of leveraging would have helped you better put your post but then you probably didn't understand the difference between leveraging and over leveraging and that's why you taught leveraging is totally bad of which that's not completely true as some persons have benefited so we'll leveraging which has helped them achieve greater heights trading than they would have if they were to wait till they are able to gather the appropriate amount needed to get a position on a trade.

Exactly. While the demand is high, exchanges will definitely take advantage on it, simply because they will also benefit from its profits. And as long as it will put profits on them, regardless if the traders end up losing, they will continue to encourage traders to use leverage in trading.

I guess I don’t see leverage as a bad thing, because it actually enhances the potential to make higher profits. But for a newbie’s point of view, it’s certainly not advisable for him because of lack of skills and experience in the market.

It is one of the great things about leverage, they are the steroids of investments, then, losing in leverage is normal, but profits come, as long as you have correct management of your finances, and talent.

Consequently, the business for the exchanges is to have the product, since they are highly desired, and they are "approved" by the "FDA" /that is, by steroid mentions, then it would be the equivalence.    

If you don't have that, just buy and sell.  

Exchanges are running a business, so it’s normal for them to offer leverage trading so they can also gain profits out from those leverage trading transaction costs. And while these traders are mostly greedy, most particularly those beginner traders, they eventually grab those ideas so they can start maximizing their profits at a short term duration. Not realizing that using leverage in trading gets even more risky, most especially if you are still not inclined in that form of trading.

I am not trading in other markets but there's a likely that it's also an inspiration from those just as what HB has explained. They're not pushing traders to stick with the leverage, it's all about our freewill when we trade.

Those that have background on it will definitely find for it. But this isn't for everyone, I've read countless failure stories about how they've increased their leverage and just a few hours away when they're not able to monitor it, they've been liquidated.

That's the risk and everyone except the newbies aren't aware of how volatile this market is. But the rest, you can count on them that they know what they're doing.

Well, you could use leverage as your advantage if you are actually a good and reliable trader. That’s where you can maximize your profits and earn consistently. However, leverage is never good for those who are still starting to learn the process in trading. They should only trade with a minimal amount, something that they can afford to lose. Traders should know when to use leverage in trading, and when not to, in order to control the risks in trading and lessen their losses in trading.

leverage still being offered by many exchange or trading platform because people like it, they can make quick buck out of it from the slightest price movement ever, aside from the fact that exchange also make money from it.
but so far I've seen so many trader using leverage feature with lower capital to use, I guess it works like safe keeping their money form being used entirely just for one trading activities I find it rather quite effective, just leveraging 25x 3% of your money if worst come to worst you only lose 3% of your entire money but spot trading with entire capital if market take a hits your entire capital take a hits too even though its not lost 100%.
at the end of the day, both have their own advantages, avid trader that trades daily usually uses leverage far more frequently than the other people I presume.
so yes it might be dangerous but it has its place among those people that likes volatility and like to speculate, just remember though high leverage only gonna work for people that knows how the market acts.

But did you know that people that is making money from trading are the patient people. They have high amount of money and they are going 1x leverage or less than 1x leverage. I think what he meant is that leverage is bad because it draws the liquidation price closer to the market price but as the leverage increase, the exchanges are making more money.

Most traders have a background in Forex and regular trading markets, in which Leverage is used due to slow price movements. Therefore, traders often start with 1x leverage, and soon it turns into an addiction to reach a quick profit, so we see 10x leverage or more, which often leads in the end to losing your money.

I disagree with you that leverage is bad, it is good, but use the leverage wisely. One of the advantages of leverage is that you do not need to have a big amount of money before you have the power to take certain risks. It would have been so discouraging to some people if they did not have access to leverage.

The leverage calculation is even very convenient in crypto trading where exchanges make it flexible for us. If it were to be the traditional brokerage arrangement, it would be worse. Imagine, you need to have at least $10,000 before you can place a single trade with x1 in Forex by using a lot size of 0.1 if you use the leverage of 1:1. This was, unfortunately, the least lot size one could trade when I started Forex trading then. Now tell me, how many people can have that kind of money to trade with?

Leverage helps us reduce margin and open more risk, it is we who should be mindful of the risk we take and focus/prioritise on our money and risk management. The issue with people using leverage is not leverage itself but overleveraging by using all the risk associated with the particular leverage they choose. This isn't good. Now, how is that the fault of the leverage itself or the dealing house offering it? No one forces us, my friend.

Exactly and I tend to agree.

These should be the main reasons.

• Profitability, it's all about money.
• Increase trading volume, when the demand is high.
• Attract more traders which means for them more profit.

Traders trying to have a minimal risk on leverage trading by using stop-loss might still be hoping that they can manage the risk in this kind of trading.  As they said, a high risk means possible high profit.

Anyone can try leverage but how long you're going to do it? It's advisable that don't do it seriously when you are not even experienced and can't take that much risk.

Stay on the spot and be good with it.

They're not pushing it as it's not mandatory. It's part of their services offered to every trader as each trader doesn't have the same risk ratio and appetite.

Leverages are roots of bad and worst things. When society, economy and market are good, you will feel leverages are like magic tools for you to get rich quick. It's time when you become more easily to forget about risk and lessen your principles on risk and capital management and how to use leverage to avoid risk and liquidation. It's time when things become worse and you even don't aware of such slowly changes.

When all things from society, economy to market become bad enough, you will see leverage is like toxic pill for you.

They get benefit from it. Losers is their customers, traders, not exchanges so exchanges have no reason to stop providing leverages, futures trading to customers.

Because demand is high. That's simply just it.

As for leverage being bad, it is bad if you don't know what you're doing — which 95%+ of people really don't, just like trading in general. Could be a great tool if you truly know how to trade(hedging purposes and such).

The answer is simple: the exchange offers leverage, as there is a demand for this type of trading. And despite the high risks of using leverage, this type of trading is very popular among traders and if you adhere to the rules of risk management, it becomes less risky.