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Leverage is King

Updated: Jun 3

You can buy shares of a company and watch it grow slowly or use leverage (Forex\CFD broker) and without owning it you can make ten times the profit in the same time if you placed the trade at the right time. Unless you are like Warren Buffett and wish to hold stock over long periods of time then you most likely will want to see some kind of profit sooner rather than later. Check out my Buy and Hold VS Trading post.


Some brokers now offer Share CFD trading which means you can trade a stock like a currency without ever owning it.


You may have heard bad things about leverage and yes it is dangerous if you don’t know what the waves are doing or if you don’t use a protective stop. If however you have a good understanding of the waves then you will be successful in making a profit.


The reason for this is because when you expect a wave to move only a certain distance you can set a target to take profit and complete the trade. You also protect your capital before initiating the trade by creating a stop level so that if the trade doesn’t go your way and the price at which you put your stop at is touched then the trade is automatically taken off at that predetermined price.


Calculating your risk\reward is the key component to trading, if you enter the trade with only a small stop then your risk is minimal. It is only advisable to take the trade if the reward is more than twice the risk otherwise you are wasting your time and increasing the risk.

Playing it safe with leverage and learning the waves will set you on the path to making profits consistently over the long run. Take this bit of advice from Warren Buffett if you will.


Rule 1: Don’t lose money. Rule 2: Don’t forget Rule 1.



Want to learn how to read market waves properly? check out The Online Course

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