June
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Re: Help with leverage
Quoted from the Baby Pips:
Leverage Defined
The textbook definition of “leverage” is having the ability to control a large amount of money using none or very little of your own money and borrowing the rest.
For example, in forex, you can control $100,000 with a $1,000 deposit. Your leverage, which is expressed in ratios, is now 100:1. You’re now controlling $100,000 with $1,000.
Let’s say the $100,000 investment rises in value to $101,000 or $1,000. If you had to come up with the entire $100,000 capital yourself, your return would be a puny 1% ($1,000 gain / $100,000 initial investment). This is also called 1:1 leverage. Of course, I think 1:1 leverage is a misnomer because if you have to come up with the entire amount you’re trying to control, where is the leverage in that?
Fortunately, you’re not leveraged 1:1, you’re leveraged 100:1. You only had to come up with $1,000 of your money, so your return is a groovy 100% ($1,000 gain / $1,000 initial investment).
Now I want you to do a quick exercise. Calculate what your return would be if you lost $1,000.
If you calculated it the same way I did, which is also called the correct way, you would have ended up with a -1% return using 1:1 leverage and a WTF! -100% return using 100:1 leverage.
You’ve probably heard the good ol’ clichés like “Leverage is a double-edge sword.” or “Leverage is a two-way street.” Well….as you can see, these clichés weren’t lying.
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Re: Automated System or Manual System?
I prefer the manual system since the EA can't adapt itself when the trend changes
Why am I learning Forex?
in General Forex Discussions
Posted
Re: Why am I learning Forex?
I never think learning forex as my shortcut to get easy money. For me, learning forex is the best way to learn about discipline, emotional control, and money management. When I've mastered those three things, I believe(money) success will find a way.
Keep on spirit :geek: