A question about leverage

[Msamabay]

Greetings to all, I am new in the forum, as they can notice for my publications count, but I have been studying trading techniques for more than a year.I became interested in this by chance, seeing a thread on technical trading in another forum.The author was kind enough to teach us his system and recommend books on the subject.However, he did not operate mainly Forex;My introduction to trading was in the futures of the Mini-Dow and the Mini-Russell 2000Student to pay and without the possibility of leaving my job to operate during market hours.When I discovered that it could be operated in the Forex market with a fraction of capital, I opened a mini account and began to observe and do some occasional operations.I found this forum a few weeks ago and I have read many of the posts here.Something that I have seen mentioned a couple of times is that, although it can be operated with a $ 500 account, it is considered that it is very subcapitized.It seems that the general opinion is that you need a larger account to be properly capitalized, and I have seen that that number varies between $ 20,000 and $ 250,000.Although a major account would allow me to operate complete lots with a lower leverage, am I at any disadvantage when operating with high leverage at mini-lot levels?

[Momemapkm]

I am not sure how to answer exactly your question, but I will share my thoughts.I would not say you have a disadvantage for having a small account.Obviously you would win more for operation with a larger account, but that assuming you are really winning."Properly capitalized" will have a different meaning for each person.If you are trying to live from trading, obviously a $ 500 or $ 1,000 account will not be enough.But if you are only gaining experience and maybe doing a few dollars from time to time, it is better to have a small account, in case you lose all the capital.For me, leverage does not mean much;It all depends on money management and the percentage of risk by operation according to your stop loss.With a balance of $ 500, I think that operating mini-lots is too large.With a 30 pips stop, you would be risking 6% per operation, which is high according to most standards (unless your system has small stops

[ohmywalgomf]

Yes, you are at a disadvantage;The "noise" of the market can ruin you, what they call "player's ruin."The Forex is very volatile, so even if you choose the right direction, the market can temporarily go against you.You need enough capital to withstand short -term countercasters.The exact numbers depend on your trading style, but it is best to use a demo account adjusted to the capital you have.For example, if you only work with $ 500 using mini-Lotes, it opens a demo account of $ 5,000 and operates complete lots.Pay special attention to your worst setbacks and do not look too much at the profits.This will give you an idea of ??real risk.My general rule is to limit myself to a leverage of 10: 1 maximum (that is, $ 1,000 for mini-lots or $ 10,000 for complete lots

[Msamabay]

As for money management, I have it very covered.During the rise of the poker online, I played long before the US government put an end to that.Poker money management skills are transferred to trading perfectly: never risk more than a small percentage of your total bankroll in a single game.Currently, Opero lots of $ 0.10/pip with typical stops between 10 and 20 pips, depending on the temporal frame.So at any time I have between 0.2% and 0.4% of my capital at risk.Once you begin to show consistent benefits, I will increase to the common standards of 2-3%.I just wanted to make sure not to be overlooked, which seems that it is not the case.

[Msamabay]

Thanks for your comments.It seems that the key to handling a small account is to maintain a low risk by operation and use micro-flops for greater flexibility.Even so, I wonder if there are specific strategies that work better with small accounts.Has anyone here successful operating with this type of limitations?

[GELO7XG7]

Operating with small accounts is more a mental challenge than technical.You need to have incredible patience because growth is slow, and any error can be devastating.My advice is to focus on swing trading strategies with small objectives.Thus you maximize your opportunities without exposing your capital too much in each operation.

[MHC]

Honestly, if you operate with a $ 500 account, do not expect great results.It is a practice field, not an account to generate income.Focus on learning, because if you cannot handle a small account, a large one will not be profitable either.It is not the account size, it is how you manage it.

[Ajgm12]

Wow, a $ 500 account and worrying about leverage!It's like taking a knife to a sword fight and asking if you should worry about the direction of the wind.The leverage is irrelevant if you do not have a solid plan.With $ 500, each error hurts double.Prioritize consistency first of all.

[Nes]

The high leverage is a double -edged sword.On the one hand, it allows you to open larger operations with less capital, but also increases the risk of burning your account quickly.If you are starting, use the lowest possible leverage.It is better to learn with less pressure and margin of error than risk everything in a few operations.

[Chmokic.shelgok]

There is nothing wrong with operating with a small account if you are clear that you are learning.The problem comes when you expect disproportionate and end frustrated results.Take it as an opportunity to improve your skills.If you can be profitable with a small account, you will be ready to handle a bigger one.