Can I trade with the leverage less than 1:100, i.e.1:33?
Leverage 1:100 — is maximum that the broker can offer. You can send a request to the broker in order to change the leverage to the lesser one. But does it make sense? Let’s see an example. You?re supposed to have $10 000.
You use leverage 1:100, and you open 1.0 lot position. Necessary margin is $1 000 (i.e. 10% of your deposit). Stop out will occur if your Loss is more than $9 800. It’s more than 980 pips in EUR/USD.
You use leverage 1:33, and you open 1.0 lot position. Necessary margin is $3 000 (i.e. 33% of your deposit). Stop out will occur if your Loss is more than $9 400. It’s more than 940 pips in EUR/USD.
Stop out occurs when your Equity (Balance+ /- Profit/Loss) is less than 20% of the necessary margin. In this case broker is entitled to close all or part of your positions.
Resume: lesser leverage involves harder marginal requirements. You won’t find any advantages in lesser leverage. In order to reduce risks you shouldn’t reduce your leverage but you should rigidly observe the rules of Money Management.
Note:
There are two ways of changing your leverage:
1. To come with your passport to the nearest to You office of Alpari and fiil in the application form for changing the leverage.
2. To send to our mail address:
a) a copy of your passport (main page with photo, registration);
b) the filled application form for changing the leverage.
