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LEVERAGE

October 22, 2012

Trading with leverage. This should be the core task for each trader. I think mainly because we are not talking about investing. So you should take the highest leverage possible within your trading system. The main problem when talking about leveraging is the system drawdawn. You can blow off all your capital within three days or three hours if it’s not correctly settled.

I will list all the factors:

DRAWDAWN

STOP LOSS

POSITION SIZING

(MEAN REVERTING OR TRENDFOLLOWING SYSTEM)

VOLATILITY

To set the proper leverage to your trading methodology you should consider all these factors. I won’t explain in details now, but just to get some help, I’m trading now with a 15X leverage with these patterns.

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