LEVERAGE: Destruction or Gateway?

The ability to use leverage in Forex trading is the main reason why I chose to start trading. No needed interest in mathematics either, Forex trading can quadruple your original invest quickly. Trading a $1000 account at a micro accounts leverage of 400;1 you can have a goal of 20pips a day and make about $100+ USD a day. Maybe even a $1000 in profits and a total of $2000 by the end of the second week. Sounds good right, well this is where it gets exciting. On the third week, your 20 pip goal will now equal about $200 a day ending with a $1000 profit in a week totaling $3000 by the 4th week. And the 4th week your 20 pips would be around $300 for a days work. Exciting huh? We would all like to leverage our money thinking we can achieve these returns. But did you know you can lose your money just as fast as you can make it?

Actually leveraging your account to achieve these results will most likely increase your chance of failure. A trader needs to be able to hold up to the temptation of the offered leverage. As a trader, we can use the high leverage at the right moments, but do you know when these moments are?


Having the ability to use leverage when making quick scalping trades gives a trader an advantage in Volatile markets. However, many beginner traders often find themselves using leverage in a revengeful way. We should never use any sort of Martingale strategy, but more an observation, that decides if the trade has momentum or not. Would you like to enter a trade when the market is flat with little movement?