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Ideal Leverage To Use For Forex Traders

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Ideal Leverage To Use For Forex Traders

In this Forex trading vlog, I discuss a question I frequently get on the ideal leverage to use. Vlog #236.

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Many people get interested by Forex trading when they hear the word “leverage”. Leverage is marketed by some brokers as a way for traders to make money.

I don’t see it that way…

I see leverage as a tool that’s allowing me to execute my trading plan properly.

So what’s the ideal leverage for Forex traders?

It’s going to be a specific answer for every trader. In short, you must understand what leverage allows you to do as a trader and to what extent you need it.

If you take a single trade in a year, chances are you don’t even need leverage.

However, as a day trader or swing trader, you’ll often be in a situation where you need to enter multiple trades. Increasing the leverage in your account will reduce the margin requirements (what you need in your account to enter a trade).

You can compute the margin requirement for a specific position with the Forex Margin Calculator provided by Oanda.

Now, ask yourself how many trades you’ve taken at the same time. Ensure that the leverage setting in your account will allow you to take that number of trades at the same time.

If so, you’re good to go! The issue of the ideal leverage for Forex beginners is fixed!

If you are aspiring to Forex but wonder how to put together a solid trading plan, I recommend you grab my FREE One-Page Trading Plan Template. It will help you simplify your trading strategy on a single page!

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