Because of liquidity and volatility issues, even forced margin call trading might not happen fast enough for some accounts. It is then possible to lose more than you have in your account. As a result you would then have a negative balance and owe Bitcoinica money
Having 10X leverage means you can end up owing a lot more than you ever wanted to.
Now what ends up happening is some traders will go negative and just open a new account. That's a problem for Bitcoinica, as I've seen mentioned before, so it may end up that identity (and maybe a credit check even) will be necessary for highly leveraged (5X) accounts or eventually for all accounts even someday.
Topic: Why not leave bitcoinia in maximum leverage? - page 2. (Read 3051 times)
Yup, one can do that, the effect is the same.
It is more 'dangerous' to miss-click though. And if you get carried away it can be devastating.
It is more 'dangerous' to miss-click though. And if you get carried away it can be devastating.
I've never heard of adjustable leverage with one
Oanda lets you set your leverage, though obviously you can't trade BTC there.
That's pretty much the question I'm asking in this thread!
Do you know how a traditional brokerage account would act in regards to that leverage question?
I've never heard of adjustable leverage with one
It really doesn't matter. Leverage only affects how much of your margin is used when you open a position.
Position sizing is most important. Your max loss on each trade needs to be known up front, say 1% of NAV. You stop loss is set based on whatever technicals you use. The position size is set according to what your max loss would be if the stop loss were hit.
Leverage has no effect on the position sizing I described. It only affects how many positions you can put on at the same time.
Position sizing is most important. Your max loss on each trade needs to be known up front, say 1% of NAV. You stop loss is set based on whatever technicals you use. The position size is set according to what your max loss would be if the stop loss were hit.
Leverage has no effect on the position sizing I described. It only affects how many positions you can put on at the same time.
There is no difference in your costs. It's just a matter of discipline. Do you want to be responsible for keeping yourself in line, or would you rather the site enforce it for you?
That's pretty much the question I'm asking in this thread!
Do you know how a traditional brokerage account would act in regards to that leverage question?
That's pretty much the question I'm asking in this thread!
I am not advocating trading 10:1 leverage... with that spread you would immediately die.
But why not trade 2:1 leverage with the account left in 10:1?
We need a proper exchange where you can earn the spread.
But why not trade 2:1 leverage with the account left in 10:1?
We need a proper exchange where you can earn the spread.
Its very possible I dont understand...
Would trading 2:1 leverage with the account left in 10:1 act differently than trading 2:1 with the account at 2:1?
I am not advocating trading 10:1 leverage... with that spread you would immediately die.
But why not trade 2:1 leverage with the account left in 10:1?
We need a proper exchange where you can earn the spread.
But why not trade 2:1 leverage with the account left in 10:1?
We need a proper exchange where you can earn the spread.
Is there any reason not to leave it in 5:1/10:1 leverage, assuming your account balance will support it, and just exercise self discipline? Seems to offer max flexibility and no downside.
Or will your borrowing costs be increased? I haven't checked.
Or will your borrowing costs be increased? I haven't checked.
The best reason I have come up with for myself is that I am not able to limit my loss to an acceptably small % when using 10:1. I was either taking a very healthy profit (profit is great when you can get it at 10:1), but all my losing positions lost too much too quickly and I end up getting forced out.
Is there any reason not to leave it in 5:1/10:1 leverage, assuming your account balance will support it, and just exercise self discipline? Seems to offer max flexibility and no downside.
Or will your borrowing costs be increased? I haven't checked.
Or will your borrowing costs be increased? I haven't checked.
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