Lower Leverage CFD providers?

[brantfordwarner]

Hi Guys,

I’m reasonably new to CFD platforms, and I’m struggling to get a handle on gearing/leverage. I like to pick a security, then calculate my profit target, stop loss and obey the golden rule of not risking more than 2% of my account on any single trade.

I have a live and practice account with iii, but then only offer a flat 10:1 leverage! are there platforms out there that offer say 1:2, or 1:5? [I understand that most of the best traders never go past 1:5!]

thanks guys...

Brant.

 

[anley]

I don't know about iii but if you have £10,000 in your account and 10:1 leverage that means you can buy £100k or stock, or £200k if at 20:1.

But that's the maximum leverage, nobody says you have to use that.

So if you buy £20k of stock (with £10K in your account) your effective leverage is 2:1. Basically you control the leverage by how much stock you trade.

 

[brantfordwarner]

Hi Anley,

Thanks for your answer, I can see now that I have been approaching this from the wrong direction. Out of interest, how does a typical cdf trader keep tabs on his exposure to risk?

I have a £5K Share dealing account, I usually take a £1k position size on a UK equity, put my stop in at 2 x ATR, and then just watch the chart. That way it’s simple; I can take one or two losses at a time and I don’t get muddled up. Is there a simple way for running a CFD account in a similar fashion [ie for beginners]

thanks again

Brant