WHY LOWER LEVERAGE WHEN STARTING OUT?

Starting out as a trader, you lack experience. This means that you’ll be making more mistakes, which is natural in any field. Of course in trading, you want to minimize mistakes as much as possible, since that costs you your capital.

Thus, making mistakes at the start of trading is akin to your tuition fees to get a little experience at the markets. When you trade at low leverages at the start, you lose less of your capital, which gives you more room for adjusting and learning. It’s like getting a discount for trading experience!

You shouldn’t be ashamed of starting off with low leverages and working your way up. This is something that any trader has done who has survived in the industry long enough. That, or they had to scrap new capital on a constant basis, which is difficult unless you were born with deep pockets…

But, there’s also another aspect of managing risk when forex trading though, or trading in general. We’ll be discussing that below too…