If you don’t have a lot of money, but you still want to make make money trading the stock market, and you want to avoid unstable penny stocks, then getting a lot of leverage is the way to go. I am going to show you in this article the best way to get maximum leverage trading stocks.
What is leverage?
Leverage is the increased buying power that you get with a margin account. Buying power means that you can buy more shares effectively put into your margin account. Let’s say you open a margin account and deposit $3,000 in it. The broker may give you a leverage of 6:1, which means you can now buy shares with a buying power of $18,000 (or 6 * $3,000).
Why is a lot of leverage great?
Many beginner traders think they can only buy cheap penny stocks because they only have little money, and they see people bragging with huge percentage moves on penny stocks. The harsh reality is, though, that most penny stock traders will lose all their money by massive volatility. Penny stocks often present completely inexplicable price movements so that classical trading techniques are more based on luck than anything else. Because of the hefty price movement, you could get your money even stuck in indefinite halts.
Leverage, on the other hand, would allow you to buy higher-priced stocks with much more stable price action, better slippage, and you still make a decent amount of money because you can buy a reasonable amount of shares. As a bonus, you also learn how to handle a bigger account before actually risking a lot of your own money.
How to get maximum leverage
Many brokers offer you leverage. They usually differ profoundly on the size of the leverage you can get. A lot of brokers will give you a 4:1 or 6:1 leverage, which is pretty much standard. If you don’t have a lot of money though you want to risk, some providers offer way more than this.
We highly recommend you to look into the service that Tradenet offers. Tradenet is a service that provides educational programs that allows you to become a funded account trader, trading CFDs via an investment firm they are working close to called TEFS. You can get up to a 28:1 leverage with the funded account making trading higher-priced stocks more accessible than ever.
The leverage you get with TEFS varies depending on the package you chose with Tradenet. As you can see in the listing below, you can get a $14,000 trading account with as low as $399.
Since you are trading a funded account, you will have a max loss on each package that is higher than your investment but does not cost you additional money. Here is how much you can lose per package:
If you want more information about Tradenet, consider checking out our in-depth review of Tradenet here. All their packages are available for a discount with this link here.
Conclusion
Trading with leverage is a great way to become a profitable and consistent trader. It has a much higher success rate than trading cheap penny stocks.
Tradenet, together with the investment firm TEFS they are working close to, offer by far the best leverage for stock trading. The educational service and their community are excellent for new traders to get started in the stock market. You can get their trading packages at a discount with this link here.
If you are unsure whether Tradenet is for you, you can also try out their FREE 5-day trading challenge here.