When trading forex what is the difference in cutting leverage in half and cutting order size in half?
D DD asked:
Is there a difference between the two?
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Is there a difference between the two?
Profit/loss will be cut by the same amount either way, correct?
February 20th, 2009 at 10:29 am
Cutting leverage means that you will be wielding less power with every dollar you invest.
If you invest $10,000 at 100-to-1 leverage, you are essentially controlling $1,000,000 worth of assets.
At 50-to-1 leverage, your $10,000 is only controlling $500,000 worth of assets.
Both ways, the most you can lose is your initial $10,000.
Cutting order size means you are investing less at a time.
Say you buy one $500 lot instead of 2 $1,000 lots.
That’s my understanding, anyway.
You are better off cutting lot size than leverage, I think.
February 21st, 2009 at 2:18 am
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February 21st, 2009 at 6:41 pm
First of all you should understand what is the leverage and order means. It’s 2 different things.
leverage: if your leverage is 1:100, that’s mean you can trade 100 000 if you have 100 in hand
order: the actual money involved is depends on your leverage and money in account.