Low leverage FX trading

[allinger]

One question - two angles:

1) Are there any brokers that can supply low leverage, like 1:2-1:5?

2) (since I've yet to find an answer to #1) What is the formula/principle (no Nobel price/MENSA here...) to downscale 1:10 leverage to, say 1:3 leverage. Provided it's possible?

 

[jacinto]

One question - two angles:

1) Are there any brokers that can supply low leverage, like 1:2-1:5?

2) (since I've yet to find an answer to #1) What is the formula/principle (no Nobel price/MENSA here...) to downscale 1:10 leverage to, say 1:3 leverage. Provided it's possible?

1) dont know,

2) say, you use 5% of capital for margin on a broker that gives 100-1, then decrease margin as a % of capital, and you get the effect you wanted. i.e. decrease pip value per trade.

j

 

[Rhody Trader]

One question - two angles:

1) Are there any brokers that can supply low leverage, like 1:2-1:5?

2) (since I've yet to find an answer to #1) What is the formula/principle (no Nobel price/MENSA here...) to downscale 1:10 leverage to, say 1:3 leverage. Provided it's possible?

I've never seen any forex broker below 10:1 leverage, but it really doesn't matter. You, in the end, decide how much leverage you use relative to your account.

Here's what I mean.

At 10:1 a $10,000 account could trade a $100,000 position. If you wanted to trade at 3:1, then either you would want to increase your account to $30,000 and trade the same $100,000 lot (if your broker doesn't do mini lots), or trade a $30,000 position on the $10,000 account.

Question. Are you thinking to use a forced margin liquidation as a kind of stop? That's the only reason I could think that someone would actually look for a broker with lower leverage settings(not that I'm saying that's a good idea, though).

 

[allinger]

Thanks!

At 10:1 a $10,000 account could trade a $100,000 position. If you wanted to trade at 3:1, then either you would want to increase your account to $30,000 and trade the same $100,000 lot (if your broker doesn't do mini lots), or trade a $30,000 position on the $10,000 account.

I had a feeling that it wasn't rocket science - thanks for clarifying the margin thingy for me!

Question. Are you thinking to use a forced margin liquidation as a kind of stop? That's the only reason I could think that someone would actually look for a broker with lower leverage settings(not that I'm saying that's a good idea, though).

Actually I've been reading up a bit and it struck me that the 1:400 "easy profit - 200 pips a day guaranteed"-leverage might (with a bit of half-a**ed money management) just as well mean a violent and noisy death to my account... Lower gearing might mean lower profits, but lower losses as well - i.e. allowing me to be in the game for a longer time. I hope...