Re: Currency trading
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I want to get into currency speculation. I'm going to invest in medium term. First of all, how much leverage is advisable if I want to be fairly conservative? What should my stop loss limit be? I know these questions are very general and probably hard to answer but I would appreciate any advice.
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Firstly, you need to study the basics of trading which can apply to any market, and then open a play money account to practice trading. The placement of stops is a huge topic but there's lots of literature available. Currencies are also not suitable for investment. You can take long-term trades, but investing in them is 0EV at best.
As for leverage and stops, I'd suggest you ring-fence some money you can afford to lose. Take a position and place a logical stop (its placement will need to be decided by you so it meets your trade objectives) and leverage your position so that should your stop be hit, you'll lose no more than 1% (conservative) or 2% (a little more of a gamble) of your ring-fenced account.
Talking about 5:1 and 20:1 leverage insn't really helpful. You need to think in terms of how much of your account is at risk when you place an order.
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