If I have 1000 USD and a leverage of 1:100, does that mean that my lot size is 100,000? Making each pip worth 10$?

I just shake my head at people that trade with leverage on small account balances/ short time durations. You guys don't understand what leverage actually is. Would you sign up for a credit card that charges 50% interest per hour and then use it to trade? That's the equivalent of what's happening when you use a small account balance to access high leverage/ trade short time durations. Leverage is a tool that brokers use to take advantage of financially illiterate people that don't understand statistics. The only reason brokers offer it is because it allows them to maximize the effective value of their spread fee. That's it. Leverage is not something that can be used wisely by the average person. If your novice investment strategy starts with using a high amount leverage, you are destined for failure and need to rethink what your approach.

/r/Forex Thread