In fact, this topic relates to margin trading, but I decided to pay special attention to this issue. So, if everything is clear to us with the leverage, then everything is not so simple with the leverage of the transaction. When we make a deal, we actually have no idea what leverage we use. We only know the amount of the transaction. It would seem, why then do we need to know the size of the used shoulder, if we do not see this parameter anywhere? So then it is, but if you approach our trading with all seriousness, and not from a novice’s perspective, you need to know the value of the leverage that you use in the transaction. Now I will explain why…

Contrary to popular belief, there are only two types of behavior of a trader when trading Forex: aggressive or conservative. In simple words – a risk trader or not a risk trader. And just these concepts are invariably associated with the amount of leverage that is used in trade. Aggressive trading always borders on high risks, and where there is a high risk, there is a high-income potential. So, if you want, having 100 USD in your account, to earn 10,000 USD per week, you will have to work with an aggressive trading strategy, or rather Va-Bank. For an aggressive trading strategy, the size of the used leverage of the transaction is from 1:11 to 1: 1000. And where there is no place for high risk, there is no place for high income. And these parameters are already inherent in conservative trading strategies, which work with shoulders in the range from 1: 1 to 1:10. Of course, these are approximate parameters, but most often this is exactly what happens. But what type of strategy to choose – everyone decides for himself. In order to understand whether we are aggressively or conservatively working, having an open transaction of 0.75 lots with our deposit of 2000 USD, we need to know what size of leverage our transaction corresponds to. We have all the data from this formula when opening a transaction. Well then, let’s calculate. Let’s say we make a deal on the EURUSD currency pair. In this case, the formula will take the form: shoulder = (1.13120 * 75 000) / 2000 = 42.42 or 1:42. Our leverage falls into the range of aggressive trading strategies – we work with increased risk. If we do not want to take risks and wish to bring our transaction to a form characteristic of conservative trading, we have three ways: to reduce the quotation by searching for another currency pair with a different current rate, to reduce the working lot, and to increase the deposit. The easiest and quickest way is to reduce the volume. Let’s now calculate the leverage for the same transaction, but with a volume of 0.15 lots. Leverage = (1.13120 * 15,000) / 2000 = 8.48 or 1: 8. But this leverage is already consistent with a conservative strategy. And if we were striving for this, then in this way we determined the practically maximum lot for our safe trade.

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