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Whether to Increase Leverage or Lot Size?
This is a discussion on Whether to Increase Leverage or Lot Size? within the Forex Discussion forums, part of the Forex Markets category; When trading FOREX and wanting to increase size of trades is it better to increase your leverage or lot size? ...
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Oct 8, 2009, 9:25am
| #1 |
| Senior Member  Join Date: Apr 2008 Posts: 311
| Whether to Increase Leverage or Lot Size?
When trading FOREX and wanting to increase size of trades is it better to increase your leverage or lot size? I'm not sure if there are pros and cons - if it makes any difference to the spread for example depending on which you choose to increase? I'd appreciate any thoughts. Thanks |
 
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Oct 8, 2009, 11:34am
| #2 |
| Legendary Member Join Date: Dec 2004 Location: Massachusetts Posts: 1,909
  | Re: Whether to Increase Leverage or Lot Size?
Given the same account balance you cannot increase your leverage without increasing lot size, nor can you increase lot size without increasing leverage. Leverage = Position Size/Account Balance.
__________________ John Forman Author - The Essentials of Trading |
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Oct 8, 2009, 2:05pm
| #3 | |
| Senior Member Join Date: Apr 2008 Posts: 311
| Re: Whether to Increase Leverage or Lot Size?  Quote:
actually my forex account allows leverage to be adjusted 100X to 500 x independently of Lots . So eg if I am currently trading 1 lot at 100x leverage, but want to increase size, will it make a difference to my trading whether I increase to 2 lots or instead to 200X leverage>? I have read that leverage increases the spread but cannot see how that is. I suppose carrying losses overnight may incur more cost on leverage?? | |
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Oct 8, 2009, 2:30pm
| #4 |
| Legendary Member  Join Date: Oct 2008 Posts: 3,767
| Re: Whether to Increase Leverage or Lot Size?
increasing leverage doesnt increase the size you are trading! 1:100 leverage or 1:500 leverage 1 lot is still 10 us $ per point. you are just changing how much margin you have to put up
__________________ "Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild Bullsh!t, Bearsh!t all smells the same to me! |
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Oct 8, 2009, 2:38pm
| #5 | |
| Banned Join Date: Jul 2009 Posts: 870
| Re: Whether to Increase Leverage or Lot Size? Quote:
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Oct 8, 2009, 2:45pm
| #6 |
| Legendary Member Join Date: Oct 2008 Posts: 3,767
| Re: Whether to Increase Leverage or Lot Size?
there is no point in using super high leverage as just means you are gona blow out that much easier! at 1:500 trading 1 lot you will get a margin call after just 20 points!
__________________ "Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild Bullsh!t, Bearsh!t all smells the same to me! |
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Oct 8, 2009, 3:33pm
| #7 | |
| Senior Member Join Date: Apr 2008 Posts: 311
| Re: Whether to Increase Leverage or Lot Size? Quote:
that explains a lot So, to be sure I'm clear on this, I take it from what you say that trading 1 lot on 500X leverage gives the same profits per pip as at 100X or even zero leverage? And Leverage is to take advatage of the brokers money if you have less funds than would be necessary for the size you would like to trade?? (with all the problems of margin call /blow out if it goes against you) | |
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Oct 8, 2009, 3:39pm
| #8 |
| Legendary Member Join Date: Oct 2008 Posts: 3,767
| Re: Whether to Increase Leverage or Lot Size?
correct
__________________ "Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild Bullsh!t, Bearsh!t all smells the same to me! |
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