What does trading with 1:3000 leverage look like in practice?
Recently, the maximum leverage provided by stock brokers has increased tens, or even hundreds of times.
Just 10-15 years ago you had to try hard to find a broker that allows you to use a leverage of more than 1:100, but now most companies provide leverage of 1:1000, 1:2000 or even 1:3000.
Looking at these sizes, it may seem that you no longer need your own money to trade Forex; it is enough to have 10 dollars and a leverage of 1:3000 and you can open transactions with a volume of 30,000 dollars or 0.3 lots.
But what would trading with such a gigantic leverage actually look like and how realistic is it to make any money with such a debt-to-equity ratio?
This leverage is available here on professional accounts such as ecn.mt4, pro.ecn.mt4 and ecn.mt5, while the minimum deposit for the ecn.mt4 account is $300, and for pro.ecn.mt4 and ecn.mt5 accounts it is already 500 dollars.
Unfortunately, it will not be possible to check the operation of a leverage of 1:3000 here since for demo accounts the maximum size is limited to 1:500.
But even without opening a real account, you can calculate the basic parameters taking into account a deposit of $300 and a transaction of 8 lots for euro/dollar.
Immediately after opening a trade for 8 lots, the order shows a -$80 loss, that is, the spread for 8 lots was almost 30% of the 300 dollar deposit:
Literally three seconds later, the loss exceeded $170, and the deal was “safely” closed by force by the broker.
And this is not surprising because the cost of 1 point in this transaction is $8 for a five-digit quote. And with a fast trend, the price can overcome a couple of dozen points in just a second, and not always in the right direction.
That is, trading with a leverage of 1:3000 is more like roulette than conscious trading. And a deposit of $300 is lost in just a couple of seconds.
Therefore, there is no need to talk about any analysis or use of indicators in this case; to be frank, I don’t even understand why such a huge leverage is needed. It should also be noted that opening transactions on some currency pairs is completely impossible, since the size of the spread will exceed the size of the trader’s deposit.
Most likely, this is just an advertising ploy to attract customers, since it is completely impossible to use such a tool in your work. Even for pipsing, it is advisable to limit yourself to a leverage of 1:500.
But this is just my personal opinion, nothing prevents you from opening an account and experimenting on your own at your own peril and risk.
Use leverage 1:3000 - www.alpari.com