The problem with high leverage, and low margin is that: The forex just doesn't move (downtrend/uptrend) in a straight line. This means that if you have purchased a currency pair in the right direction, it will most likely go in the manner, just for a tiny bit, before it goes over all management. Your stop loss needs to be higher than those temporary spikes, or you will be stopped out of your position before the tendency heads on your closing position (either that, or there will be a margin call) In case you've got a $1000 dollar margin, with 400:1 leverage, this means that you can only withstand a 25 pip stop ($250 backs one standard lot with 400:1 leverage.) 25 pip spikes (spikes that temporarly go in the opposite direction) are extremely common in the Forex. But if you had an account with a 100:1 leverage, then you could place an order using a 100 pip stop loss. This 100 pip stop loss would cover you nicely against spikes that are unwanted that are temporary.Originally Posted by ;