Hi Everyone! This is simply a brief summary of WHY it's important to understand how to use leverage. We should always start (begin) with how much of our own equity we should allow to be at risk of liquidation. I personally allow myself to use up to 3 percent of my TOTAL equity in a position; while also allowing the price action to move up to 15 percent against my SWING position. This tutorial is referring to SWING trading and NOT scalping.
I'm not going to take the time to write down everything here in the description. The content in the video should be sufficient to help one understand how to determine your position size. Your position size must rely on the following:
How much of my TOTAL equity should I risk in a leverage position?
What percent will I allow price action to move AGAINST my position before liquidating my position?
Knowing those two (2) things (above) helps you determine the proper size of your position and how much leverage you should use in that position to avoid losing more than I intended.
IMPORTANT: MAKE SURE YOU ARE USING ISOLATED LEVERAGE RATHER THAN CROSS LEVERAGE. Why? To avoid losing more of your total equity. Especially, if you did not setup a stop loss. It's best to simply use "isolated" leverage where at all possible.
Remember... This is NOT a detailed tutorial on margin (leverage) trading. The main purpose of this tutorial was simply to point out how to manage the amount of your TOTAL equity you are willing to risk in any given trade... Why? Because doing this also helps you determine what should be the proper size of your position. However, you cannot know the proper size of that position if you do not also factor in how much of a move you will allow AGAINST your position before being liquidated.
I'm not sure if this is confusing or not. It may be quite confusing to many and not so confusing to others. This is why it's best for you to watch the video.
Thank you for your valuable time!
Happy Trading and Stay Aweosme!
David
I'm not going to take the time to write down everything here in the description. The content in the video should be sufficient to help one understand how to determine your position size. Your position size must rely on the following:
How much of my TOTAL equity should I risk in a leverage position?
What percent will I allow price action to move AGAINST my position before liquidating my position?
Knowing those two (2) things (above) helps you determine the proper size of your position and how much leverage you should use in that position to avoid losing more than I intended.
IMPORTANT: MAKE SURE YOU ARE USING ISOLATED LEVERAGE RATHER THAN CROSS LEVERAGE. Why? To avoid losing more of your total equity. Especially, if you did not setup a stop loss. It's best to simply use "isolated" leverage where at all possible.
Remember... This is NOT a detailed tutorial on margin (leverage) trading. The main purpose of this tutorial was simply to point out how to manage the amount of your TOTAL equity you are willing to risk in any given trade... Why? Because doing this also helps you determine what should be the proper size of your position. However, you cannot know the proper size of that position if you do not also factor in how much of a move you will allow AGAINST your position before being liquidated.
I'm not sure if this is confusing or not. It may be quite confusing to many and not so confusing to others. This is why it's best for you to watch the video.
Thank you for your valuable time!
Happy Trading and Stay Aweosme!
David