Crikey, 400:1 leverage!? I've never heard of such a thing before. Is there anywhere else where a regular guy can get this kind of leverage?

(As to the term 'gambling', I think people are using the broad definition by which day-trading and other such financial transactions are termed a 'gamble' rather than a 'very risky, poorly informed financial investment on such a short time-scale that one can't possibly make informed predictions of price movement'. Similarly, I believe that poker is often legal because it's a 'game of skill', but that doesn't mean it's not also a gamble.)

Most online forex brokers push people into 200:1 using a "mini" account that trades in lots of 10K. Normal size accounts trade in lots of 100K. I'm guessing they have the little ones to get some people making big returns quickly and then bump them up to larger and safer accounts.

I remember reading something in Jack Schwager's Trading Wizards book where someone talked about successful hedge funds not using more than 5-10x leverage.

"I remember reading something in Jack Schwager's Trading Wizards book where someone talked about successful hedge funds not using more than 5-10x leverage."

Leverage doesn't mean much if you don't know the beta (a measure of risk) of the security. I think for most hedge funds the amount of leverage varies wildly based on what's being traded, so it's tough to apply a single rule of thumb to an entire market.

You can get 400:1 leverage at most "retail" forex brokers. You will have fewer options if you want _lower_ leverage, not higher. Something like 90% or more of traders lose all of their money, and the market maker gets to keep all of it, so they have all the interest in offering insanely high leverage. You are practically guaranteed to wipe out your account at 400:1.