By using leverage in every trade allows day trading systems to trade all markets that would typically be unavailable otherwise. Leverage also works as a positive solution when trading more contracts, lots or shares than the investor would otherwise be able to place. It never increases the risk of the trade, although it does reduce the loss.
To maximize your trading capital, consider using leverage in day trading. It is never more risky in any trade than using cash. By using leverage responsibly you can maximize your profits while you minimize your losses. You can easily modify your account to add leverage, or you can simply open a new leverage, or margin, account and begin new day trading strategies that take advantage of the amazing properties leverage offers your trading schemes.
Why Use Leverage to Day Trade?
Using leverage gives you the ability to trade a larger position in the market (a larger number of contracts or shares) using only a small amount of your investing trading capital. By using leverage effectively, you can reduce risk while increasing your profitability.
Is Leverage Risky or Not?
If you asked one hundred investors if leverage is considered a risky proposition, most would probably speak to the affirmative. The reason investors would consider leverage to be significantly high risk is because it appears to magnify potential profits and losses equally in every specific trade. However, leverage actually works as an extremely efficient way to trade capital. It allows a typical investor to take a larger position on their trade (by having more open contracts or shares) than trading with traditional non-leveraged amounts of capital, without maximizing losses.
In effect, the leverage never alters the potential profit or loss that any specific trade can produce. Rather, it only reduces the amount of the invested trading capital that can be invested, which then releases the trading capital for other trades. Additionally other than being an efficient way to maximize your trading capital, leverage can be used to reduce the amount of risk on nearly all types of trades. In essence, by using more leverage you can generate more profits while at the same time, minimizing your loss. Suggesting that any new trader should avoid trading using any type of leverage simply reduces their profit levels.
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