daviddavids said: ↑
1. What the difference in making 10% with 1000 =1100. Or make 10% with 100 and 1:10 leverage = also 1100? What is wrong in my simple calculation? ... But what if you have 3000 dollar capital and buy the 3000 shares or you have 300 dollar capital with 1:10 leverage and then buy the 3000 shares. Isnt this the same? Cant you just replace capital with leverage as long as you dont make to much risk?

2. What return in percentages can professional traders make with stocks and leverage in a day, month and year? Is it 5% profit per day or 50% per month or 100% per year? whats average?

3. Also there is in the news that a plain crashed, which is offcourse a very terrible event for a lot of people.. However this also effects the stock markets and traders? Now for me I have long term stocks (for a few years) and short term stocks (for a few days). How should you react to this as a trader?
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1. You don't really have a lot of leverage in buying stocks. If stock 'XYZ' is $3.00 per share, and I want to buy 1000 shares, then I have to have $3000 of buying power in my account. If I only have a cash account, then I have to have the whole $3000 in cash. However, if I have a margin account, I don't neccesarily have to have $3000 in cash. As long as I have $2000 in cash, then T.D. Ameritrade will loan me $2000 "on margin", thus giving me a total of $4000 buying power.

So let's say I buy the stock, using my $2000 cash and $1000 of their margin. It only takes a slight decrease of the stock price for TD Ameritrade to issue a "margin call", which is basically demanding that I put another $1000 cash in my account (within 48 hours, I think) or they can sell all my shares of that stock in order to get their margin money back. If their selling causes [b/me[/b] major losses, then too bad. Thus, margin can be a very dangerous thing and should not be used without great care.

Now if you just want to buy a stock option, not the stock itself, then it's possible to get some good leverage because you're only spending a fraction of the cash that the stock itself would cost you. Two guys here, Acstudio and Aahepp, can help you with advice on options. Use the search function to find some of their posts on options.


2. Last I saw, about 10% per year is the "benchmark"... meaning 10% is what the market does on any given average year. However, you should set realistic goals for yourself, based on your own abilities, and not get caught up in watching what your neighbor is doing. And I agree with Tom that percentages aren't that important. Actually pretty worthless in my opinion, cause I believe cash is what rules.


3. The Malaysia Airlines plane didn't crash, it was purposely shot down, but regular people see it as a crash and therefore the stock price of Malaysia Airlines dropped about 11%. If I traded on foreign exchanges, I would probably consider it a great time to buy some while the price is such a bargain. So for your short-term stocks, take advantage of the tragedy in every way you can. (That sounds cold-hearted, yes, but stocks are about making money, not about sharing our feelings.) For your long-term stocks, do nothing, as this is only a blip in the grand scheme of things and won't affect the long-term price.