[questions] - Leverage and Account

[Bandiit]

Hi, want to get some insights and constructive comments about about account leverage and in what currentcy it is reasonable to keep your trading account?

In my world there is no need to leverage your account, eg. 1:100? Yes, by having leverage 1:500 or even 1:1000 trader will have more virtual money power and can gain or loose more real money. If money management rules are applied by trader then trader will have same balance profit/loss from account with 1:0000 or 1:1 leverage account, eg. risking max 2% of account on every trade.

In what currency to keep trading account if not US resident? As everyday life goes with EUR, is it reasonable to have account in USD? It is quite a lot of profit goes into changeing currency. Has anybody insights about it?


-cheers

 

[Rhody Trader]

In terms of your second question, it is usually best to have your account currency be your home one as it makes the accounting easier. Also, if you have it in some other currency then you are effectively making a long-term bet on that exchange rate. Someone new to the markets is hardly in a good position to be making those kinds of calls.

As for the first part, if you're risking an appropriate amount on your trades then leverage isn't a consideration (unless you're bumping up against your limits).