As of 12/20/2024
Indus: 42,840 +498.02 +1.2%
Trans: 15,892 +32.54 +0.2%
Utils: 986 +14.76 +1.5%
Nasdaq: 19,573 +199.83 +1.0%
S&P 500: 5,931 +63.77 +1.1%
|
YTD
+13.7%
0.0%
+11.9%
+30.4%
+24.3%
|
44,200 or 41,750 by 01/01/2025
16,100 or 17,700 by 01/01/2025
1,050 or 975 by 01/01/2025
20,500 or 19,300 by 01/01/2025
6,100 or 5,775 by 01/01/2025
|
As of 12/20/2024
Indus: 42,840 +498.02 +1.2%
Trans: 15,892 +32.54 +0.2%
Utils: 986 +14.76 +1.5%
Nasdaq: 19,573 +199.83 +1.0%
S&P 500: 5,931 +63.77 +1.1%
|
YTD
+13.7%
0.0%
+11.9%
+30.4%
+24.3%
| |
44,200 or 41,750 by 01/01/2025
16,100 or 17,700 by 01/01/2025
1,050 or 975 by 01/01/2025
20,500 or 19,300 by 01/01/2025
6,100 or 5,775 by 01/01/2025
| ||
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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