As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
|
43,500 or 41,600 by 10/15/2024
16,800 or 15,700 by 10/15/2024
1,125 or 1,025 by 10/15/2024
19,000 or 17,600 by 10/15/2024
5,900 or 5,600 by 10/15/2024
|
As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
| |
43,500 or 41,600 by 10/15/2024
16,800 or 15,700 by 10/15/2024
1,125 or 1,025 by 10/15/2024
19,000 or 17,600 by 10/15/2024
5,900 or 5,600 by 10/15/2024
| ||
How does the use of leverage affect profitability in the foreign exchange market?
This article is based on the writing of James Stanley in his article Three Rules to Risk Management as published in the July 2014 issue of Technical Analysis of Stocks & Commodities magazine.
When I read an author who supports his theories with statistics, I love it. Stanley did just that in his article. I'd like to share some of his findings with you.
The article is based on research conducted by FXCM.com. "FXCM is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association," according to their website.
The study included data from 2000 to 2010 on more than 12 million trades in the most heavily traded currency pairs. Here's what they found.
Highest Equity | Average Trade Size | % Profitable | Leverage |
$0 to $999 | $26,000 | 21% | 26 to 1 |
$1,000 to $4,999 | $30,000 | 33% | 6 to 1 |
$5,000 to $9,999 | $54,000 | 37% | 5 to 1 |
The above table shows how the use of leverage decreased as the size of the account grew. As leverage decreased, the percentage of profitable trades increased.
I wonder if this behavior trend continues for larger account sizes....
-- Thomas Bulkowski
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