Thought for the day - Don't over leverage

Author: Giles Coghlan | Category: News

Leverage can be a killer

Leverage can be a killer
The use of leverage is almost certainly the most important aspect of risk management. In turn proper risk management is the top priority for all traders. Or at least it ought to be. 

This is the case whether you are trading for a fund, your family or even a personal account. Furthermore, whether people realise it or not, managing risk is going to be one of the single most important factors in your success or otherwise as a forex trader. 

You can't trade if you have no capital left. Many traders have over leveraged, lost all their capital and then never traded again. In contrast, the proper use of leverage will prevent you from destroying your account and preserve your capital as a trader.

Sometimes people say it is just about greed or fear. However, often times it is simply ignorance as to how leverage works. 

Do you understand how leverage works in FX trading?

If not, check out this article I have written in the past here. 

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