After analyzing the advantages and risks of using leverage when forex trading, some traders prefer to use leverage, while others say no to it. The truth is that leverage is an excellent trading tool as it can help you gain huge returns. The problem is that it comes with high trading risks, and traders who own large trading accounts may not find leverage appealing.
For example, if you have an account with more than $100,000, you may find it very uncomfortable to risk the account with high leveraged trades. This is why many traders with large accounts prefer not to apply leverage in their trades. Even though they may experience losses along the way, it will be hard for them to blow the entire account.
Another group of traders that may benefit from not using leverage are those interested in earning from their savings. This group of traders does not always want to take huge risks in the market, so they prefer to earn from their deposit, which is always around 12% per year.
Also, stock traders do not necessarily have to use leverage. Unlike currencies that are not that volatile, stocks are volatile and can move by 5%, 10%, or even 20% on a good trading day. If it moves that much, buying stocks without leverage can be very profitable compared to Forex. Therefore, long-term stock investors can always invest their money without leverage. They will only have to wait for stocks to fluctuate by a higher percentage and then sell them without dealing with many risks in the market.