[flatbush]

I have read this series of articles pertaining to leverage. The philosophy that for traders "Leverage is good, and more leverage is better" is maintained without reservations until the article "Leverage: Friend or Foe".

The author does not consider that a prop firm may give a lot more leverage. For daytrading, my broker gives 20:1 for Equities and Options.

After reading these articles, I wondered of there could be such a thing as TOO MUCH leverage.

Originally Posted by henryduncan12 »

There is a good article titled "Trading Using Leverage" at about.com. I think, it will be more helpful for you.

Source: Trading Using Leverage

[JLJ]

Thanks everyone, this is all helpful.

[iwillsurvive]

Originally Posted by flatbush »

I have read this series of articles pertaining to leverage. The philosophy that for traders "Leverage is good, and more leverage is better" is maintained without reservations until the article "Leverage: Friend or Foe".

The author does not consider that a prop firm may give a lot more leverage. For daytrading, my broker gives 20:1 for Equities and Options.

After reading these articles, I wondered of there could be such a thing as TOO MUCH leverage.

You mentioned your broker gives you x20 buying power (leverage).

What broker do you use?

[Obsidian]

I learned not to use any leverage while trading stocks...
Imagine you were using 10x leverage when this happened

[iwillsurvive]

Originally Posted by Obsidian »

I learned not to use any leverage while trading stocks...
Imagine you were using 10x leverage when this happened

That's why the importance of a tight stop.

[iwillsurvive]

Originally Posted by flatbush »

I have read this series of articles pertaining to leverage. The philosophy that for traders "Leverage is good, and more leverage is better" is maintained without reservations until the article "Leverage: Friend or Foe".

The author does not consider that a prop firm may give a lot more leverage. For daytrading, my broker gives 20:1 for Equities and Options.

After reading these articles, I wondered of there could be such a thing as TOO MUCH leverage.

But I'd like to know what broker that offers you 20:1 leverage Flatbush?

[BlueHorseshoe]

If you're especially keen to trade with leverage, then you'll probably find it easier to obtain by focussing on instruments that a) are highly liquid, b) don't gap (24 hour session, or Cash plus Globex sessions), c) cannot lock limit.

This means focussing on instruments like stock index futures. As a daytrader, for example, you can readily control a single E-Mini S&P contract, which recently has had a value of between $60 and $70k, with about $500 in your brokerage account. Now I'm not suggesting that you should do that . . . but it gives you a good idea of where leverage is easy to come by.

Hope that's helpful.

[Obsidian]

Originally Posted by BlueHorseshoe »

If you're especially keen to trade with leverage, then you'll probably find it easier to obtain by focussing on instruments that a) are highly liquid, b) don't gap (24 hour session, or Cash plus Globex sessions), c) cannot lock limit....

that's right..and keep in mind that because you have a stop does not mean it will always be executed at the price you specified...