In previous sections I have alluded to variations in leverage or gearing from trading platform (Dealing Station) to another. The range is huge with the most conservative sites pegged in the 10-20:1 are (so called "Safe FX" by some) to a typical high of 100:1 (although the FXCM Mini platform is at an astounding 200:1). At the conservative end we are talking in terms of the sort of margin leverage available in US commodities and futures while at 100:1 leverage things begin to happen very quickly, especially if you are on the wrong side of a trend!

Regardless of which platform you choose to trade with and the degree of leverage offered money management is extremely crucial. Throughout my trading career I have heard the warning not to overtrade. Most speculators hearing this admonition interpret it much differently than I do. Typically traders think in terms of turnover when considering overtrading as a concept. I do not. Overtrading to my thinking is not velocity of position turnover but rather trading to or beyond the limit of one's resources.

In other words, I may trade in and out of any given position in minutes if that particular trade doesn't feel "right" or begins to work against me beyond my comfort level. Most traders think this is overtrading but at the same time think nothing of committing nearly all of their trading capital to a single position.

My approach may not suit your own comfort level but before deciding upon the highest level available, bear in mind the equally high level of risk you will be assuming. This is especially true for those who will only commit $2000 USD or less to an FX account. Under those circumstances I would want to look hard at Oanda with its conservative 20:1 gearing and flexible trading units as a starting point.

The topic of money management must also include the topic of stops (stop loss orders). This again is an area of disagreement with some traders preferring to trade without stops and among those who do the precise latitude is highly variable. I can not suggest trading without stops nor can I offer any hard fast rule as to how much latitude to allow before closing out losing trades. I would suggest two things however and they would be to set stops at your own comfort level you are willing to risk losing per trading unit and use a demo/game account to pre-determine what that level may be.