Leverage for scalping.

Some traders, when deciding to trade with scalping, think that the main thing in this strategy is the minimum duration of transactions, but in fact, the leading role is played by the size of the leverage.

Leverage for scalping should allow you to get the maximum profit in a minimum time period.

At the same time, a pattern is always monitored: the shorter your duration of transactions, the greater the leverage, and, accordingly, the volume of transactions that you can use in your trading.

For greater clarity, let's look at this issue using specific examples.

1. Trading on one minute time period M1.

If you analyze the size of the candles over this period, you will find that the range of movement of the currency pair on M1 is rarely wider than 40-50 points with a five-digit quote.

It is this indicator that will be the guideline when choosing leverage and, subsequently, trading volumes. Then we take into account the cost of 1 point, on average, with a volume of 1 lot , the point will be equal to one dollar, do not forget that we are talking about a five-digit quote.

That is, with a transaction of 1 lot per minute, you can lose or earn 40-50 dollars. Now we estimate the size of your own deposit, for example, you have only 100 dollars in your account, it is hardly acceptable to lose half of the funds from one transaction, we reduce requests by at least 5 times, that is, the recommended volume for 100 dollars is no more than 0.2 lots.

And the maximum possible loss from one transaction is 8-10 dollars. In order to open a deal of 20,000 euro/dollar, we need about 23,000 dollars, divide this amount by our deposit 23,000/100 and get 230 or 1:230. That is, in order not to complicate things, for M1 we take a leverage of 1:300.

We similarly calculate the size of leverage for other time periods.

2. Trade in five minutes M5.

Here you can already find candles of 100 points each, which means if you expect to maintain a transaction for five or more minutes, you should reduce trading volumes.

If we are still trading a deposit of $100, and the range of movement has increased by 2 times, then the trading volume should be reduced by 2 times to 0.1 lot.

As a result, you will lose no more than $10 per transaction. At the same time, it is not necessary to change the leverage itself when volumes decrease; this point does not play a role.

It is clear that calculating the scalping trading volume in accordance with the planned risk is a purely individual matter; some are more careful, while others pip with a leverage of 1:500.

Since the planned risk indicator does not mean that you are obliged to hold a losing trade until you lose all 100 points, this guideline can only be used to set a stop loss .