Leverage Definition
Leverage Trading Strategies
Leverage Definition - Leverage Meaning - 100:1 leverage ratio. This is the leverage ratio option in stock indices trading that's also used by experienced traders.
For $1000 Account Equity
With 1:100 leverage ratio when you open a account with $1000 you will have capital of $100,000 to open stock trades with - with 1:100 leverage it means your broker gives you $100 dollars for every one dollar that you have in your account. Therefore, if you have 1000 dollars - 1000*1:100 Leverage is equal to 100,000 that you can trade indices with.
In Trading with $100 you can control $10,000 capital to trade indices with after leverage of 1:100
For $500 Account Equity
With 1:100 leverage ratio when you open an account with $500 you will have capital of $50,000 to open stock trades with - with 1:100 leverage it means your broker gives you $100 dollars for every one dollar that you have in your account. Therefore, if you have 1000 dollars - 1000*1:100 Leverage is equivalent to 100,000 that you can trade with.
In Trading with $1000 dollars you can control $100,000 dollars capital to trade Indices with after leverage of 1:100
For $1,000 Trading Account Equity
With 1:100 leverage when you open a account with $1,000 you'll have capital of $100,000 to open stock trades with - with 1:100 leverage ratio option it means your broker gives you $100 dollars for every one dollar that you have in your stock trading account. Therefore, if you have $1,000 dollars - 1,000*1:100 Leverage is equal to 100,000 which you can trade with.
In Trading with $500 you can control $100,000 capital to trade indices with after leverage of 1:100
Leverage Definition - Leverage Meaning - 100:1 Leverage ratio
For $2000 Trading Account Equity
With 1:100 leverage ratio when you open an account with $2000 you will have capital of $200,000 to open stock trades with - with 1:100 leverage ratio option it means your broker gives you $100 dollars for every one dollar that you have in your stock account. Therefore, if you have 2000 dollars - 2000*1:100 Leverage is equivalent to 200,000 that you can trade with.
In Trading with $2000 dollars you can control $200,000 capital to trade indices with after leverage of 1:100
Leverage Strategies - Types of Leverage in Indices Trading
more leverage you use greater the profits or losses
The less leverage you use lesser the trading profit or loss
It is therefore better to use less leverage so that to minimize the risks involved. The higher the leverage ratio option used the higher the risk. This is one of the Indices leverage guidelines not to trade with more than 5:1 leverage ratio.
In Trading money management rules: It is always advisable to stay below 10:1 leverage ratio option which is still high, most professional traders use 2:1 leverage ratio meaning they trade only 2% of their Indices Trading Account.
To Learn and Know More about Indices Leverage Strategies - How to Read the Indices Leverage Meaning Below:
Leverage Strategies - Types of Leverage in Indices Trading - Types of Leverage Guide
What's a Trade Plan? - Written Plan Example Template
Alternatives: Automated EA Trading or Copy and Paste Signals
