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Author Topic: Leverage query  (Read 525 times)

Online vik2001

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Leverage query
« on: July 23, 2019, 06:03:21 AM »
Hi.
Had a general question about leverage. Say i want to copy a signal using a leverage of 1:500.
But with my broker im using a leverage of 1:30, Will this cause me any issues when copying the signal as my leverage with broker is different to signal ?


Offline Fastrack Forex

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Re: Leverage query
« Reply #1 on: July 23, 2019, 06:06:51 AM »
depends on the trader's trading style. Why not you ask the trader himself?

If he opens too many trades on his 500:1 account, you will be affected as your leverage is only 30.

Offline petersurrey

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Re: Leverage query
« Reply #2 on: July 23, 2019, 06:38:06 AM »
Hi.
Had a general question about leverage. Say i want to copy a signal using a leverage of 1:500.
But with my broker im using a leverage of 1:30, Will this cause me any issues when copying the signal as my leverage with broker is different to signal ?

If it is on MQL5 they work it all out for you example 30/500 or 0.06*master account lot size = your new lot size if using the same size account...otherwise adjust for account size and lot size to ensure you don't max out. A 30:1 broker requires approx 3K margin to open 100K lot size. If the master account has a much lower balance you can increase return/loss by making your balance much bigger. If using a fxblue trade copier you can adjust to suit any size you like within the limits of your account.

Offline Westie

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Re: Leverage query
« Reply #3 on: July 23, 2019, 10:01:15 AM »
I think Peter Surrey has covered everything there.

I think you can reduce your multiplier to keep your margin requirements roughly correct, but trading at 1/10th risk will likely make the return so small as to be pointless. If your return was projected to be 2% per annum say, well Forex wouldn't be a good investment given the risk of a signal provider wiping the account out.

I notice in another thread your looking to invest about 30K or so. I would put some time into understanding the maths behind risk, margin and leverage fully. I know it's boring, but that's a lot of cash to be relying on advice from strangers on the internet.

Good Luck.

Online vik2001

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Re: Leverage query
« Reply #4 on: July 23, 2019, 11:12:31 AM »
Thanks guys explained well  ;)
I wasnt entireley sure if the copier makes the adjustment for you like peter said or in this instance perhaps would be better of using fixed lots for every 1000/2000 invested. 

The only issue why i didnt want to use fixed lots say 0.01 for every 1000 invested it would have to be adjusted in the copier if the balance went up or down accordingly.

Offline drunkfx

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Re: Leverage query
« Reply #5 on: July 24, 2019, 05:24:15 PM »
Hi.
Had a general question about leverage. Say i want to copy a signal using a leverage of 1:500.
But with my broker im using a leverage of 1:30, Will this cause me any issues when copying the signal as my leverage with broker is different to signal ?

Of course, due to lower leverage he can set wider stop and take profit targets. Your position with his profit targets and stop losses can hit stop loss or take profit earlier.

sidewalk-star

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Re: Leverage query
« Reply #6 on: July 24, 2019, 09:50:02 PM »
This thread reminded me of an article I read by Gary Comey (Blackwave Ltd) a couple of years ago.

"What leverage is the trader using and what leverage is yours? Ideally the leverage is as close as possible. If the trader has 500:1 leverage and you are trading with 50:1 then your margin requirement for each trade is ten times greater than his. Will your available funds cover that?"

Link to article: https://www.financemagnates.com/forex/bloggers/copy-trading-dos-donts/

MQL5 has quite a sophisticated algorithm to take care of things but other copy trading platforms may not allow enough adjustment, as the difference between the 1:500 master account and your 1:30 copy account is pretty significant.

Offline iMusingKiMi

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Re: Leverage query
« Reply #7 on: August 04, 2019, 10:32:07 PM »
It is simple you want to copy all of his trade. Just divide how many times his leverage are higher than yours, that's decide your position.

Offline drunkfx

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Re: Leverage query
« Reply #8 on: August 05, 2019, 01:49:55 PM »
It is simple you want to copy all of his trade. Just divide how many times his leverage are higher than yours, that's decide your position.
Exactly basically difference in buying power of the leverage should be translated in corresponding reduction of the lot size. But well if the vendor trades with different lot size you have to use some software that will choose correct position sizes.

Offline iMusingKiMi

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Re: Leverage query
« Reply #9 on: August 06, 2019, 01:51:23 AM »
It is simple you want to copy all of his trade. Just divide how many times his leverage are higher than yours, that's decide your position.
Exactly basically difference in buying power of the leverage should be translated in corresponding reduction of the lot size. But well if the vendor trades with different lot size you have to use some software that will choose correct position sizes.
Yup. I think most of it allow to do that as for lot sizes copied.

 

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