Trade Stock Indices

Which is the Best Leverage to Use in Indices Trading for Beginner Traders?

Leverage in Indices Trading

The best trading leverage to use is 100:1 trading leverage. This is the leverage option in stock indices trading that is also used by experienced stocks traders.

For $100 Dollars Account

With 1:100 trading leverage when you open a trading account with $100 you'll have capital of $10,000 to open stock trade transactions with - with 1:100 leverage it means your broker gives you $100 for every dollar which you have in your trading account. Hence, if you have $100 - 100*1:100 Leverage is equivalent to 10,000 that you can transact with.

In Trading with $100 you can control $10,000 dollars capital to trade with after deploying leverage ratio of 1:100

For $200 Dollars Account

With 1:100 trading leverage when you open a account with $200 you will have capital of $20,000 to open stock trade transactions with - with 1:100 leverage it means your broker gives you $100 for every dollar that you have in your trading account. Hence, if you have $200 - 200*1:100 Leverage is equal to 20,000 which you can transact with.

In Trading with $200 dollars you can control $20,000 capital to trade with after applying leverage of 1:100

For $500 Account

With 1:100 trading leverage when you open a trading account with $500 you'll have capital of $50,000 dollars to open stock trade transactions with - with 1:100 leverage it means your broker gives you $100 for every dollar which you have in your trading account. Hence, if you have 500 - 500*1:100 Leverage is equal to 50,000 that you can transact with.

In Trading with $500 you can control $50,000 dollars capital to trade with after applying leverage of 1:100

For $1,000 Account

With 1:100 trading leverage when you open an account with $1,000 you'll have capital of $100,000 to open stock trade transactions with - with 1:100 leverage it means your broker gives you $100 for every dollar that you have in your trading account. Hence, if you have $1,000 - 1,000*1:100 Leverage is equal to 100,000 which you can transact with.

In Trading with $500 you can control $100,000 dollars capital to transact with after applying leverage of 1:100

What's the Best Leverage to use when stock indices trading? - 100:1 Leverage

About Leverage

The greater the leverage you as a stock indices trader use, the more the profit or loss

The less leverage which you use the lesser the profit or loss

It is henceforth better to use less leverage so that to minimize the risks involved. The higher the leverage used the higher the risks. This is one of leverage rules not to trade with more than 5:1 leverage option.

In money management leverage guidelines: It's always advisable to keep below 10:1 leverage which is still high, most professional equity managers use 2:1 leverage in their account.

To Learn and Know More about Leverage and Margin - How to Read the Topics Below:

Leverage and Margin Explained

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