29 Comments

  1. Shouldn’t you be working out the maximum you pips you would lose based on the stop loss that’s being set in place and then based on the lot that you are trading, then convert that into the maximum $ you could lose for that trade, then work out the percentage of this $ amount against your total equity, then determine your leverage?

  2. Your leverage doesn't really matter as long as you're not using it to trade say $10 a pip on a 2k account. What's more important as you would say is understanding money management as a whole and what you're risking on your trade.

  3. Hello VP and fellow chatters, I am extremely perplex by the whole leverage stuff ! is leverage amplified?, i.e Lets say your stop loss is @ $200 representing 500 pips (0.4 lot size). If market goes against you the LEVERAGE amplified will hit your $ amount much faster but the pips wont be hit as it further away. My conclusion LEVERAGE is severely not worth the risk of amplified profits!.

    Unless your already on established seasoned bad girl or boy trader that do not actually need leverage.

  4. First thank you for everything! I first listen to every podcast you have because you are the only one who doesnt seem to try to sell us the american dream, get money fast without effort. Now i started to tread with a demo account and i want to do exaclty as you say and teach. The leverage i can choose from my broker starts at 1: 10 and the second is 1: 50. I'm only using 5000 eur in my demo account and when i start with real money i'm able to invest 5000 eur . You talk about 25000 dollars to set a leverage at 1:40 So is it oke To set mine at 1:50 when i use 5000 eur. If you dont replay its oke i'll keep searching your blog for the right answer and still think you're way is the best so thank you again

  5. Just wanted to say spot gold in canada you require 4% I think it is the same in the US not sure where the 1 to 1 comes from. I guess I could be wrong.

  6. I still don't know how leverage works. I don't get it, can someone show me how leverage works in trading ? I mean, in a live trading, with a chart ? And how to compute our pip value with this ?

  7. the amount of loss is determined by the number of lots you placed and the distance of the SL to current price. i.e 0.01 or 0.1.

    leverage only helps by lending money to your trading account at a higher "interest". as what VP mentioned, it allows people to put in small portion of their trading funds into the broker but still want to trade 2% (for example) of their total trading fund. 1-2% is the golden rule per trade to minimize the risk of ruin.

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