A few currency pairs in the forex market are some of the least volatile assets which a small trader usually deals with. Hence a large number of novice traders unfortunately leverage their positions to the tilt, exposing themselves to an unnecessary risk which consequently a lot of times ends in total account loss.
Photo by Jordan Heinrichs.
Don’t get me wrong, leverage is one of the most important financial markets features, a priceless tool, just like any other major market driving force, it should be used wisely in order to be the vehicle for higher profitability. However for that to happen one should never forget that a low volatility asset doesn’t mean it can’t spike, because it does. When comes to apply leverage, traders need to take that into account, better safe than sorry.
