My Top 20 Online Trading Currency Pitfalls (EMBARRASSING!)

3: Using Too Much Leverage

Overleveraging is trading too large a position size relative to your available margin.

Even a small market move against you can be enough to cause an overleveraged position to be liquidated for insufficient margin.

This common no-no is made more tempting by the generous leverage ratios available with some online forex brokers.

Just because they offer you 100:1 or 200:1 leverage does not mean you have to use it all. Don’t base your position size on your maximum available position.

Instead, base your position size on trade-specific factors such as proximity to technical levels or your confidence in the trade setup/signal.

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