Hello,
Which is better for a beginner : Having a high leverage with small position size or having low leverage with small position size ? I have 2 demo accounts both are loaded with $700
When I opened a position on my 1:500 leverage account (0.5 lot) the used margin was ~$100 so I had $600 free margin (Trade volume 50K)
When I opened a position on my 1:100 leverage account (0.5 lot) the used margin was ~500 so I had $200 free margin (Trade volume 50K)
Having a less free margin means less ability to handle floating loss and as you know the prices keeps getting up and down and therefore this low free margin may damage my ability to be flexible with the market (handling floating loss) until It reaches my T/P .Let's say I have long position and the price decreased by 40 pips ($200 because I have 0.5 lot size) and then increased by 60 pips . In the first account I can handle the 40 pips floating loss but in my second account I'll get margin call and they'll close the position . Am I understanding it wrong ? As I see having more free margin is in my favor , isn't it ?
**Note : I'm not having more than one position active in the same time
Which is better for a beginner : Having a high leverage with small position size or having low leverage with small position size ? I have 2 demo accounts both are loaded with $700
When I opened a position on my 1:500 leverage account (0.5 lot) the used margin was ~$100 so I had $600 free margin (Trade volume 50K)
When I opened a position on my 1:100 leverage account (0.5 lot) the used margin was ~500 so I had $200 free margin (Trade volume 50K)
Having a less free margin means less ability to handle floating loss and as you know the prices keeps getting up and down and therefore this low free margin may damage my ability to be flexible with the market (handling floating loss) until It reaches my T/P .Let's say I have long position and the price decreased by 40 pips ($200 because I have 0.5 lot size) and then increased by 60 pips . In the first account I can handle the 40 pips floating loss but in my second account I'll get margin call and they'll close the position . Am I understanding it wrong ? As I see having more free margin is in my favor , isn't it ?
**Note : I'm not having more than one position active in the same time