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What difference leverage 1:500 and 1:2000 ?

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It gives you the opportunity to control large sums of money with little money.

For every $1 in your account you can control some $X where X is greater than 1. For example, 100:1 leverage means you control $100 for each $1 in your account. If you have $1000 in your account you can control $100,000 in positions.

Similarly, if you have $1000, you are controlling x times its worth


This whole idea of 1:200, 1:500 is called LEVERAGE


Hope this clarifies your doubt.
Be careful with too high leverage.
 
leverage is a big topic im sure there are lots of youtube videos you can watch.
The higher the leverage the higher the profit but also the risk and loss is very high too.
you can open bigger positions with biger leverage but keep in mind liquidations is faster to if you dont manage your risk.
 
i'll explain my way of leverage to you, that most beginners understand
all examples are based on open trades of a lot size 0.01, not anything higher than that and with a $250 balance
Broker # 1 = Leverage 1:50
Acct balance = $250
can only open up max trades 1-2 (margin cost per trade is so high it eats up your balance until trade is close and returns the cost of the trade back to your balance)

Broker # 2 = Leverage 1:200
same as Broker 1 but u can open up max trades of 3 to stay in the safe zone

Broker # 3 = Leverage 1:500
max trades you can open is 4-5

Broker # 4 = Leverage 1:1000
max trades you can open is around 10-12 or all trades totaling 0.1 lot size

also margin cost changes per trading session, NY session cost the least and Asian/Sydney session is the most expensive, i don't trade London but i believe when i did it may have been the same as NY don't quote
me on it, but margin cost are much cheaper during the NY session in which my examples are based upon

hope this explains better and give you a broader spectrum of leverages
 
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Forex business is a good business due to leverage facilities. In Forex, leverage is considered an important financial tool for traders to consider when choosing a broker. Leverage increases traders' market exposure beyond their initial investment. Nowadays many brokers like Eurotrader offer the high leverage. But use it with extreme caution.
 
Whether you are a newbie or an experienced / professional trader, leverage needs to be used with caution. While leverage can give you outsized profits if the market moves in the direction you expected, it can also lead to huge losses if the market moves in opposite to your expectations.

There is no standard answer to the amount of leverage. It can differ based on your risk bearing capacity as well as on the market you are trading it – forex, stocks, commodities, etc.

But let’s just restrict the parameters to amount of experience in trading. Beginners usually have lower balance in the trading account than professional traders. I would say that if you have around $500 in your account, go with a leverage of 1:50 or 1:100. What does this mean? With 1:100 leverage $500, you can gain exposure to worth $50,000. This is already huge for a beginner.

After you have got some experience and made profits, you can try higher leverage.
 
I have been trading for a couple of years now and I have never used 1:2000 leverage. The reason is that the exposure is too high. Although you can win big and make lots of money if the market moves as you planned. But if the market goes in the opposite direction, you can lose big too.



I typically use 1:100 or even go up to 1:500 but never more than that. I received a bonus from my broker – Axiory – and some traders I chat with recommended to use very high leverage. they said I had nothing to lose because I was trading with bonus money. But I decided not to. I invested the funds widely – as if it was my own hard earned money. And I am excited to tell you that I made more than 100% returns on that.



So whether you are experienced in trading or a new trader, it is best to use leverage with caution. And always with stop loss.
 
It gives you the opportunity to control large sums of money with little money.

For every $1 in your account you can control some $X where X is greater than 1. For example, 100:1 leverage means you control $100 for each $1 in your account. If you have $1000 in your account you can control $100,000 in positions.

Similarly, if you have $1000, you are controlling x times its worth


This whole idea of 1:200, 1:500 is called LEVERAGE


Hope this clarifies your doubt.
Be careful with too high leverage.
Very well explained. Thanks.
 
i'll explain my way of leverage to you, that most beginners understand
all examples are based on open trades of a lot size 0.01, not anything higher than that and with a $250 balance
Broker # 1 = Leverage 1:50
Acct balance = $250
can only open up max trades 1-2 (margin cost per trade is so high it eats up your balance until trade is close and returns the cost of the trade back to your balance)

Broker # 2 = Leverage 1:200
same as Broker 1 but u can open up max trades of 3 to stay in the safe zone

Broker # 3 = Leverage 1:500
max trades you can open is 4-5

Broker # 4 = Leverage 1:1000
max trades you can open is around 10-12 or all trades totaling 0.1 lot size

also margin cost changes per trading session, NY session cost the least and Asian/Sydney session is the most expensive, i don't trade London but i believe when i did it may have been the same as NY don't quote
me on it, but margin cost are much cheaper during the NY session in which my examples are based upon

hope this explains better and give you a broader spectrum of leverages
very clear! thank you so much!
 
The lever should be used cautiously. The beginner should use the smaller lever. With a greater lever, I can lose capital very quickly.
 
the difference between leverage is the amount of Lots you can trade given the same money in your account. So at 1:2000 you can open positions four times the size that you can open with 1:500. This means that with 1:2000 you can be exposed four times more the amount that you can be with 1:500, if fluctuations are in your favor means gain four times more, if fluctuations are against you means lose four times more. And the more you lose the more prone you are to margin call/trade out and eventually burn your account.
 
Can anyone give perfect answer which leverage for beginner and profesional
Professionals offer trade with lower leverage because they manage large capital and are required to adhere to conservative low risk strategy as investors don't like big swings in equity. However low leverage is no better than high leverage since expected returns increase proportionally to risk you take (i.e. apply leverage). Less leverage means less expected returns (and also lower risk) but it is just a matter of personal preference.
 

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