When should you use leverage?
It’s not always the right time to increase leverage.
The conditions that typically make it worthwhile to take on more risk are:
① A major opportunity emerges
② Market volatility is low enough
③ The market structure is clear enough
④ Confirmation from the right side has already arrived
In a market like this, which is resting and consolidating after a rally, the most important thing isn’t to keep increasing leverage. Instead:
Manage your leverage and position size, and patiently wait for the next opportunity.
Go on the offensive when an opportunity comes; stay defensive when it doesn’t.
Trading isn’t about who takes the most risks,
but who has enough ammunition when an opportunity arises.
Manage risk to stay in the game longer;
stay in the game long enough, and you can catch the truly big moves.
It’s not always the right time to increase leverage.
The conditions that typically make it worthwhile to take on more risk are:
① A major opportunity emerges
② Market volatility is low enough
③ The market structure is clear enough
④ Confirmation from the right side has already arrived
In a market like this, which is resting and consolidating after a rally, the most important thing isn’t to keep increasing leverage. Instead:
Manage your leverage and position size, and patiently wait for the next opportunity.
Go on the offensive when an opportunity comes; stay defensive when it doesn’t.
Trading isn’t about who takes the most risks,
but who has enough ammunition when an opportunity arises.
Manage risk to stay in the game longer;
stay in the game long enough, and you can catch the truly big moves.
