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Can i change leverage on my account?
I read that FXCM Micro Lot accounts provide 1:400 leverage but i want to ask , can i change that leverage after opening the account?
Like can i open different trading positions with different Leverage Values..
i know some brokers provide that option that you can change leverage on each position ,
so can i change the leverage on my account myself ??
Hello ShoukaT1, and thank you for your post! On behalf of myself and everyone here at FXCM, welcome to the forum community!
Can I open different trading positions with different leverage values?
With FXCM although you cannot open different trading positions with different leverage values on the same account, you can most certainly change the trade size of each trade you place. You can also change the leverage (or margin) for the account itself.
How can I change the leverage (or margin) for my live account?
If you have an FXCM LLC (US) account, the leverage is set to 50:1 on the majors, and 20:1 on the exotics. For a full list of the margin requirements for FXCM LLC (US) accounts, please click here.
For UK or AU regulated accounts, please follow the simple steps below to change the leverage (or margin) for your account.
Step 1. Please visit MyFXCM.com and log in with the same information you use to log in to your live account.
If you do not have your user name or password, please click on the "Forgot Login/Password?" link to either retrieve your user name or reset your password.
Please click here (Trading Station II Login Help) for a visual instructions on how to reset your password.
Step 2. Once you are logged in, please click on the Change-Margin Request link.
Step 3. On this page, you will be able to change your margin from the drop-down menu indicated below. Please choose your new margin settings accordingly and then click on "Submit".
You will then see the request confirmation page.
It can take up to 1 - 3 business days to process your request, although it often takes less time.
Step 4. When finished, please be sure to log out.
I have a UK or AU regulated account, I cannot change my margin requirement to 0.25% (400:1 leverage). Why is that?
Remember that only FXCM Micro LTD (UK) accounts can have up to 0.25% (which is the same as 400:1 leverage) margin requirement. If you do not have an FXCM Micro LTD (UK) account then that is why you cannot change your margin requirement to 0.25%. If you do have an FXCM Micro LTD (UK) and you still find that you cannot change your margin requirement to 0.25%, please send an email to the operations department at email@example.com and they will be more than happy to enable that functionality for you.
Why is lower leverage important in order to improve one's chances of being successful in the long term?
One of the main reasons that new traders lose money is because they over-leverage their account by opening too large of a position, too many positions, or a combination of both. When you use excessive leverage, a few losing trades can quickly offset many winning trades. To clearly see how this can happen, consider the following example.
Scenario: We have four different traders trading on different levels of effective leverage.
Questions: What happens to Trader A account equity when the USD/JPY price falls 100 pips against them?
Answer: Trader A loses 41.5% of his account equity.
By using lower leverage, Traders B, C, and D drastically reduce the dollar drawdown of a 100 pip loss. Please keep in mind that it is not uncommon for currency pairs to range at least 100 pips a day. By over-leveraging his account, Trader A has lost almost half of his equity in just one trade. We believe that using 10:1 effective leverage on an account is a good general rule of thumb, or never having more than 1K of open exposure for every $100 of equity in the account.
Does lower leverage really work?
FXCM's experience in Hong Kong, where significantly lower leverage levels are mandated by law, suggests lower leverage results in more successful trading. As another example, many professional traders use up to 8:1 leverage and typically much less. The reason to use low leverage is to make sure that a losing position does not make a significant negative impact on the overall account.
How can I use lower leverage?
The DailyFX.com Research and Education team has created a variety of trading videos to help you identify trading opportunities using lower leverage. To learn more about money management and the benefits of trading with lower leverage, log into the DailyFX+ Trading Course. Once you are logged in simply click on "Money Management" on the left.
If you don't have a live account with us yet that's ok!
I will send you an email to provide a trial version of DailyFX PLUS so that you can use these great resources with your demo account. If anyone else needs one please feel free to send me an email at firstname.lastname@example.org and I will be more than happy to set you up with a trial version of DailyFX PLUS.
What is more important, the margin requirements on the account or the effective leverage applied to the account?
Keep in mind that the margin requirements on your account is not so much as important as the effective leverage that is applied to the account. As mentioned here at FXCM we believe that using no more than 10:1 effective leverage on an account is a good general rule of thumb in order not to over leverage the account, or never having more than 1K of open exposure for every $100 of equity in the account. Let's use a numerical example in order to better understand this concept.
Let's say that there is $5000 in an account. If I am going to follow the 10:1 effective leverage rule then that means that I am not going to open more than 50K it total positions at any given time. A few examples of this include but are not limited to not opening more than:
If there is 50K in total open positions on a $5000 account, if you are using no more than 10:1 effective leverage then more positions will not be opened until some are closed out. I tend to use about 3:1 to 5:1 effective leverage on my personal account.
Please click here to read an excellent article on effective leverage written by Jeremy Wagner, our valued Lead Trading Instructor. It's one of a series of articles written on client profitability called: Building a Better Wheel: Incorporating Profitability Statistics. I hope you find that helpful ShoukaT1!
Based on my position sizes and trading style, it doesn't seem like have enough equity to maintain 10:1 effective leverage. How do I deposit funds?
Please click on the link below that corresponds what type of account you have for more information about depositing funds:
Where can I find more information about Margin and Leverage?
For more information please visit our Margin and Leverage FAQs (Margin Trading and Leverage FAQ).
Thank you again for your post ShoukaT1! Please feel free to post with more questions or send me an email directly at email@example.com
Originally Posted by ShoukaT1
Last edited by Julius at FXCM; 06-21-2012 at 06:54 PM.
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Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Forex Capital Markets LLC. will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.