Advice on Forex, stock market, 1:100, 1:500 leverage

[Stephen89]

I have never traded in my life, a lot of work, technical analysis is required.

Someone recommended day trading, rather that long term.

Ive read on Google, on some websites with regards to investing with a leverage of 1:100, however the pitfalls of this is, if I lose, I'll have to pay the negative balance?

I have read somewhere some brokers have negative balance protection.

I thought 1:50 leverage was a bit like gambling, I put £10 on a 50/1 bit, if it wins, I'll win £500, if it loses, I'll only lose £10.

Or do I have to pay £500 on a leverage of 1:50 if it fails?

 

[BackInTheGame78]

I have never traded in my life, a lot of work, technical analysis is required.

Someone recommended day trading, rather that long term.

Ive read on Google, on some websites with regards to investing with a leverage of 1:100, however the pitfalls of this is, if I lose, I'll have to pay the negative balance?

I have read somewhere some brokers have negative balance protection.

I thought 1:50 leverage was a bit like gambling, I put £10 on a 50/1 bit, if it wins, I'll win £500, if it loses, I'll only lose £10.

Or do I have to pay £500 on a leverage of 1:50 if it fails?

Let me put it to you bluntly.

If you don't know anything and try this, you are going to lose all your money.

This is hard work to become good at it. As in work your ass off for 2-3 years before you become consistently profitable.

This is not a get rich quick scheme, you have to put in a LOT of work, energy and effort.

If you aren't willing to do that don't bother, it's not going to work out for you.

There are a lot of people who have gotten lucky at first and think it's easy then find out within a few months how "easy it was" when they lost everything they made plus the rest of their money as well.

Like the person who starts off with a lucky run at the blackjack table but as they keep playing trying to get more and more they start losing and then try and make it back and end up losing everything.

Start by paper trading for 6 months to learn then start with a $100 account, no leverage. Once you double that to $200 then double it again to $400 you are ready to start trading with more money as long as you have risk management down.

Amateurs worry about how much they will make on a trade while professionals worry about how much they could lose on a trade.

Protecting capital is the number one goal.

Also, if you arent willing to grind for a year or two with very little show for it while you are learning, this isn't for you.

 

[FlirtLife]

I have never traded in my life, a lot of work, technical analysis is required.

With zero experience, you should not use leverage. You would be better off buying index funds. Or, assuming you can't help yourself but gamble, you could try to pick winning stocks.

Ive read on Google, on some websites with regards to investing with a leverage of 1:100, however the pitfalls of this is, if I lose, I'll have to pay the negative balance?

Yes, futures contracts are legally binding contracts. As your futures contract loses money, your broker will demand you deposit more cash. If you don't, they will close the contract in your account, and use your other assets to pay off the losses. You don't have a choice - you agree to this when signing up for margin and futures trading.

I have read somewhere some brokers have negative balance protection.

That's for the broker - not for you. If your contract loses money fast enough, your account can have a negative balance. Your broker will close the futures contract, and rely on their insurance to pay the negative balance you still owe. Then the insurance company goes after you for the remaining money you owe, possibly sending you into bankruptcy.

 

[Stephen89]

Let me put it to you bluntly.

If you don't know anything and try this, you are going to lose all your money.

This is hard work to become good at it. As in work your ass off for 2-3 years before you become consistently profitable.

This is not a get rich quick scheme, you have to put in a LOT of work, energy and effort.

If you aren't willing to do that don't bother, it's not going to work out for you.

There are a lot of people who have gotten lucky at first and think it's easy then find out within a few months how "easy it was" when they lost everything they made plus the rest of their money as well.

Like the person who starts off with a lucky run at the blackjack table but as they keep playing trying to get more and more they start losing and then try and make it back and end up losing everything.

Start by paper trading for 6 months to learn then start with a $100 account, no leverage. Once you double that to $200 then double it again to $400 you are ready to start trading with more money as long as you have risk management down.

Amateurs worry about how much they will make on a trade while professionals worry about how much they could lose on a trade.

Protecting capital is the number one goal.

Also, if you arent willing to grind for a year or two with very little show for it while you are learning, this isn't for you.

Thank you very much for these insights.

 

[Stephen89]

With zero experience, you should not use leverage. You would be better off buying index funds. Or, assuming you can't help yourself but gamble, you could try to pick winning stocks.



Yes, futures contracts are legally binding contracts. As your futures contract loses money, your broker will demand you deposit more cash. If you don't, they will close the contract in your account, and use your other assets to pay off the losses. You don't have a choice - you agree to this when signing up for margin and futures trading.



That's for the broker - not for you. If your contract loses money fast enough, your account can have a negative balance. Your broker will close the futures contract, and rely on their insurance to pay the negative balance you still owe. Then the insurance company goes after you for the remaining money you owe, possibly sending you into bankruptcy.

Thank you very much for these insights.

I read somewhere I could possibly make so much times(x) my investment.

Maybe I'm too optimistic, I thought on a normal trade, let's say Forex or ftse 100, turn £100 into £300 in the space of a few minutes when the line chart ascends for a few minutes.

I'll read and learn trading.

 

[BackInTheGame78]

Thank you very much for these insights.

I read somewhere I could possibly make so much times(x) my investment.

Maybe I'm too optimistic, I thought on a normal trade, let's say Forex or ftse 100, turn £100 into £300 in the space of a few minutes when the line chart ascends for a few minutes.

I'll read and learn trading.

Yes and you can also just as easily lose that amount of money in a few minutes as well.