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How to use a leverage trading account

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Leveraged trading is one of the key reasons why the number of active traders is so high in the Forex market. People always think they can earn a huge amount of money with a small amount of capital. But if it was so easy, no one in the trading industry would have lost money. Leverage is a double edge sword which has the potential to ruin your career. To be good at trading, you need to reduce the leverage. However, some retail traders in Singapore don’t have decent trading capital. They start with a small account and eventually fail to support their families. For them, the use of leverage might be the best option.

Learning to use a leverage trading account is an art. However, if you follow the tips mentioned in this article, you can expect to make a decent profit by using a small trading account. Let’s get into the details.

Learn to use tight stop loss

You need to learn to use tight stop loss in each trade. It will help you to take advantage of the leverage since you can easily scale up the lot size. Those who rely on indicators or EAs don’t have many options to trade the market with tight stops. Most of the time, they lose a big portion of the trading capital because they use wide stops. So, how do we learn to trade this market with tight stops? The first thing that you should do is to learn price action trading. Price action traders always use the candlestick pattern to set up the stop loss in each trade. By using the highs and lows of the candle, you can easily reduce the amount risked in each trade without lowering down the lot size.

Avoid trading the major news

The naïve traders in the Forex trading industry prefer to trade the major news since they think it is one of the most efficient ways to catch the big market movements. But if things were so easy, no one in the trading industry would have made millions of dollars in profit. Think like the professional traders who know the perfect way to deal with the volatile market. 

Stop taking too much risk in each trade since the market never exhibits rational movement on the event of major news. The false spikes are the results of confused investors trading the market with big volume. To keep your fund safe, you must learn to trade this market in a stable condition. So, avoid trading the major news when you use a high leverage account.

Trade with the best broker

Very few traders prefer to trade with the best brokers like Saxo (visit company website). If you trade with a high leverage account, you never know when you will lose a big portion of your trading account. To keep your funds safe, you must choose the elite brokers. An elite broker always ensures a high-end trading environment in which you can easily execute random trades without any issues. Think about the long term goals and focus on the simple price movement. 

Take your time and try to focus on your discipline. If you manage to make some big profit with the low-end brokers, you might not be able to withdraw the profit. The low-end brokers offer insane leverage in the faulty trading environment. So, you might lose more money than expected due to heavy slippage. So, chose your broker very wisely to improve your trading environment.

Never get aggressive

Becoming aggressive after losing a few trades is a very big mistake. You should think about the potential outcome from an investor’s point of view. Losing a few trades is normal but using leverage to recover the loss is a very big mistake. You should think about the safety of your investment before you start pushing yourself to recover the loss. Follow the safe path in the investment business and you will see the change.

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