To use chat, please login.
Back to contacts

Account size, Position Size and leverage

shienri
Apr 05 2016 at 10:27
5 posts
Hi guys,

Wish to ask fellow newbies / experienced traders on this.

Whats your account size, position size and leverage that you are using / have used when you
just started out trading your first live account?

Want to get an idea before i start my live account to get my feet wet a little.

Also what kind or return should i set as a benchmark for day trading / swing trading perspective
if you have any suggestions / experience in that for a newbie.

thanks in advance :D

BIGBEARBROTHER (BIGBEARBROTHER)
Apr 09 2016 at 10:39
8 posts
When I started trading myself, I used to blow about 5K per month. Till now I have stopped this and started trusting professionals so I have begun to invest. Actually it is better to start with $1K, but it mostly depends on your possibilities

Money should work for you, not you for them
theHand
Apr 09 2016 at 13:23
365 posts
@BIGBEARBROTHER

That's spectacularly bad advice mate. No wonder you lost $5k a month.

@shienri

Your position size should be determined by your account size, leverage I pretty much ignore since my trade sizes are such that they are a reasonable percentage of my un-leveraged account size.

The problem with MT is the minimum trade size is to big for most accounts. At 0.01 lots on 100 000 unit lot size your minimum trade value on EuruUsd would be about $1 120 or so at current rates. If you have a $10k account that's over 10% of your account value. So obviously that's not sustainable. Few losses and you're out.

To get to a reasonable trade sizes on MT you basically need a $100k plus account. This the primary reason why so many people fail at fx. Read Von Tharps work for a more comprehensive explanation, he goes in depth into this.

One broker that doesn't have this issue is Oanda, where you can do a 1 unit trade or 1.12 or so. I very strongly suggest using them at first. Set the platform to use 1% of available account and take it from there till you are more familiar with the entire process. You'll quickly get a feel for how much appetite for risk you have and then you can determine trade sizes as a function of your draw down. So you make an informed decision.

This process will stop you from making the very basic mistake of trying to trade an account that's completely the wrong size for the minimum trade sizes like Edwin here used to do.


BIGBEARBROTHER (BIGBEARBROTHER)
Apr 11 2016 at 06:20
8 posts
theHand posted:
@BIGBEARBROTHER

That's spectacularly bad advice mate. No wonder you lost $5k a month.



Bad advise would be to keep on loosing $5K per month. After I let professionals manage my money things got to be better, so I have positive experience as investor😎

Money should work for you, not you for them
shienri
Apr 11 2016 at 06:21
5 posts
theHand posted:
@BIGBEARBROTHER

That's spectacularly bad advice mate. No wonder you lost $5k a month.

@shienri

Your position size should be determined by your account size, leverage I pretty much ignore since my trade sizes are such that they are a reasonable percentage of my un-leveraged account size.

The problem with MT is the minimum trade size is to big for most accounts. At 0.01 lots on 100 000 unit lot size your minimum trade value on EuruUsd would be about $1 120 or so at current rates. If you have a $10k account that's over 10% of your account value. So obviously that's not sustainable. Few losses and you're out.

To get to a reasonable trade sizes on MT you basically need a $100k plus account. This the primary reason why so many people fail at fx. Read Von Tharps work for a more comprehensive explanation, he goes in depth into this.

One broker that doesn't have this issue is Oanda, where you can do a 1 unit trade or 1.12 or so. I very strongly suggest using them at first. Set the platform to use 1% of available account and take it from there till you are more familiar with the entire process. You'll quickly get a feel for how much appetite for risk you have and then you can determine trade sizes as a function of your draw down. So you make an informed decision.

This process will stop you from making the very basic mistake of trying to trade an account that's completely the wrong size for the minimum trade sizes like Edwin here used to do.



I havent read von tharps et, will check up on it.

So if I am using $1,000 account, 1% = $10, I just use this as risk per trade right?
and using 0.01 lot to put me at a max stop loss of 100 pip?

Any suggested for total risk? like max concurrent trades / pending trades i should take note of?

ya i am looking to use oanda currently.

shienri
Apr 11 2016 at 06:21
5 posts
BIGBEARBROTHER posted:
When I started trading myself, I used to blow about 5K per month. Till now I have stopped this and started trusting professionals so I have begun to invest. Actually it is better to start with $1K, but it mostly depends on your possibilities


ya i am looking at starting small like $1k.

what you mean by trusting professionals? as in trading course?

snapdragon1970 (snapdragon1970)
Apr 11 2016 at 12:25
1944 posts
You can read my posts if you have time or I would advise getting a good Trading Education from someone who has worked on a Trading floor/Dealing desk ,Goldmansacks,Barclays etc etc.Your going to need a basic grounding to stand any chance of making a profit.

Best of Luck!

"They mistook leverage with genius".
theHand
Apr 12 2016 at 03:13
365 posts
@shienri

I'm the wrong guy to ask about max risk per trade. It's just internet bullshit as far as I'm concerned. I don't trade, I use trades to manage positions. Very different concept.

But obviously at $10 a trade you're going to be measuring your profits in cents. The concept I'm trying to get across is that it's not how much you can afford to lose that should determine account size, but rather the technical aspects of the trading account, like minimum trade sizes. That determines how much you should put down minimum.

By the way, 100 pips SL on EurUsd and 100 pip SL on GbpUsd are two very different sized stop losses. You'd have a much higher hit rate on GbpUsd since 100 pips is a smaller percentage of GbpUsd current price. Devil is in the details....!!

shienri
Apr 12 2016 at 06:54
5 posts
snapdragon1970 posted:
You can read my posts if you have time or I would advise getting a good Trading Education from someone who has worked on a Trading floor/Dealing desk ,Goldmansacks,Barclays etc etc.Your going to need a basic grounding to stand any chance of making a profit.

Best of Luck!


Ya, I am currently at a trading course, they are not from former trading floor / dealing desk though.

Still doing some foundation stuff now, will just have to work at it
and test on demo for now.

BIGBEARBROTHER (BIGBEARBROTHER)
Apr 12 2016 at 11:24
8 posts
shienri posted:
BIGBEARBROTHER posted:
When I started trading myself, I used to blow about 5K per month. Till now I have stopped this and started trusting professionals so I have begun to invest. Actually it is better to start with $1K, but it mostly depends on your possibilities


ya i am looking at starting small like $1k.

what you mean by trusting professionals? as in trading course?


By trusting professionals I mean invest your funds to PAMM or buy signals or just entrust management of your account to those people who are highly involved in trading, trade constantly, watch for market for days and nights and just live by trading. If you've got a usual job or your business and trading is like a hoby for you, then believe me, you like other 95%+ traders are likely to face failure during your forex journey, and then it is only up to you whether you give up or not. if you like trading then you should trade on demos or mini/micro accounts. And only when you make constant profit for years, it is reasonable to open usual account. I myself have made the decision to trust professional far long ago and now I can see that that is the right decision.

Money should work for you, not you for them
Please login to comment .