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A comment on eToro Makes Forex Trade Child's Play. Parent comment

Re:eToro Makes Forex Trade Child's Play by jakewolf on Tuesday November 27, 2007 @10:28PM (#84114)
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.

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Re:eToro Makes Forex Trade Child's Play by ed on Tuesday November 27, 2007 @11:18PM (#84125)
"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.

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