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Reason Cause of Death of Forex Traders 外汇交易首要死因: Page 7 of 8

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How Leverage Affects Transaction Costs

Besides amplifying your losses, leverage also has another way of killing you. It’s a much slower kind of death though, kinda like dying by a thousand cuts.

Most forex traders don’t see it coming and by the time they notice it, they’re DEAD.

This killer I’m talking about is the associated transaction costs of using high leverage.

Not only does leverage amplify your losses, it also amplifies your transaction costs as a percentage of your account.

How Leverage Affects Transaction Costs

Let’s say you open a mini account with $500. You buy five mini $10k lots of GBP/USD which has a 5 pip spread. Your true leverage is 100:1 ($50,000 total mini lots / $500 account).

But check this….you paid $25 in transaction costs (($1/pip x 5 pip spread) x 5 lots)).

That is 5% of your account!

With one trade, and the market not even moving yet, you’re already down 5%! If your trades lose, your account balance shrinks.

As your account balance shrinks, your leverage increases. As your leverage increases, the faster your transaction costs eat away at the little money you have left.

This is the slow and silent killer I’m talking about.

The higher your leverage, the higher your transaction cost as a percentage of your trading capital.

This is why transactions costs is one of the six most important factors when choosing a broker.

If you have a mini account, and open a trade with a 5-pip spread, which equals $5 transaction cost, look at how the relative value of your transaction costs increases with more leverage.

Leverage Margin Required Cost as % of Margin Required
200:1 $50 10.00%
100:1 $100 5.00%
50:1 $200 2.50%
33:1 $330 1.50%
20:1 $500 1.00%
10:1 $1,000 0.50%
5:1 $2,000 0.25%
3:1 $3,300 0.10%
1:1 $10,000 0.05%

Now you’ve learned how leverage can magnify your profits and losses, but also your transaction costs.

Leverage does not equal margin.

Leverage is how many times you lever your whole account.

The maximum amount that you are allowed to lever is dependent on your margin requirement.

杠杆如何影响交易成本

除了放大你的损失,杠杆还可以另一种方式杀死你。尽管这种死亡过程相对缓慢,有点像凌迟处死。

大多数交易者都不能发现它的到来,等到他们发现的时候,他们已经死了。

我所说的这位杀手就是与高杠杆关联的交易成本。

杠杆不仅放大你的损失,还将成比例放大你的交易成本。

假设你以500美元开了一个迷你账户。你买入了5迷你手英镑/美元,点差为5点。你的时间杠杆是100:1。

核对一下……你付了25美元的交易成本((1美元/点X5点) X 5手)。

那是你账户总额的5%。

仅一个交易,市场还未发生变动,你的账户就减少了5%!如果你的交易受损,你的账户余额将缩水。

由于你的账户余额缩水,你的杠杆增加。你的杠杆增加,你的交易成本吃掉你剩下的那点钱的时间就会越短。

这就是我说的缓慢无声的杀手。

你的杠杆越高,你的交易成本占账户资金的比例就越大。

这就是为什么交易成本是选择经纪商是6个最重要的因素之一。

如果你有一个迷你账户,交易点差为5点,相当于5点的交易成本。看看随着杠杆的增大,你的交易成本如何相对增加。

现在,你了解了杠杆不仅放大你的损失,还会增加你的交易成本。

杠杆并不等于保证金。

杠杆是你交易金额与整个账户余额的比值。

你可以使用的最大杠杆取决于所需保证金。