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Originally Posted by MickMason
Why would you need to, what difference would it make? You're basing trade size on the value of a stop loss, and stop loss based on 2% of equity, leverage would be of little consequence or interest.
Mick
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If I have $1000, and 20:1 leverage, I thought that means I can buy $20,000 worth of currencies.
A $20,000 position that loses 1% if its value is down $200.
If I have 10:1 leverage, I can buy $10,000 worth of currencies. A 1% loss would be $100.
In one case, a 1% loss cost me $200, and the other it cost me $100.
If I am buying a number of units based how many dollars I am willing to lose, it would seem leverage would matter.
Actually, I don't understand why everyone says it doesn't matter. It doesn't make sense that it doesn't matter.
My formulas use a number called "Leverage", but I just realized it should be calling % Willing to Lose (2%). The amount should be $40 intead of the $100 in my examples. So not even my own formulas use Leverage. At least my math agrees with everyone, even if I don't. Beer is not helping either.