Quote:
Originally posted by kaar4
Traderguy
If you use the whole $1000 to purchase a mini of 10000 the leverage is 10:1 but at 400:1( your $1 to buy 400 units) 10000 units will take $25 of your margin because that is exactly what I am doing on CMS. If I increase it to 1 lot 100000 units it will take $250 of my margin.
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You are missing my point. If you trade 1 mini lot (10,000) with a $1,000 account your leverage is 10 to 1, period. The leverage of your trade has nothing to do with the maximum leverage your broker allows, nor does the $ amount that your broker requires you to put up for margin effect your leverage. For this example it will be 10 to 1 whether your broker allows 400:1 and has you put up $25 or if they require you to put up $100 because they allow a max leverage of 100:1. The leverage you decide to use during a trade and the margin your broker requires are two completely different concepts.
Cheers,
TRADERguy
P.S. I know that technically it's only 10 to 1 if your mini lot is in $ for a $ denominated account but that seems a little advanced to bring in to this discussion.