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RE: How to Forex - A beginners guide to Forex Trading - Part 1: An Introduction to Forex
Leveraged trading is very risky, and is not recommended, usually if an unexpected huge market swing happens, people get wiped out and might even lose more than deposited, they end up in debt.
Some brokers offer 400:1 leverage which is clearly a scam, to lure in newbies with get-rich-quick techniques. Sure they could make 1000$ from 10$, but most of the time they will lose the 10$ and end up 990$ in debt.
Good input profitgenerator. I've briefly mentioned this in the risks section above. I will be going into leverage more thoroughly further into the series. Personally, I use 500:1 leverage with my scalping technique but I don't risk more than 1% on my total equity. I wont mention much more as I don't want people taking this as advice before the series is complete. Again good input. Thanks.
Yes for a properly managed capital its no problem if you calculate your risks well, but I am talking about newbies that put all their balance at risk with 400-500 leverage, that is the real foolish thing to do.
Indeed. I will be covering this in the next part of this series when talking about brokers and account types. I intend to make it very clear for newbies. I wouldn't want anyone o blow their account because I had not explained the risks well enough.