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How to reduce risks of margin call with small balance?
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andromeda1

Member Since Aug 30, 2010  108 posts andromeda1 Dec 05 2016 at 22:11
Hello,

i created an ECN Pro account with FXOpen, 1:200 leverage, $100 deposit. And i opened 0.01 lot position on BRENT chart.

and issue is that loss/gain while position is open is too fast, i mean i feel that my account can be doubled or wiped within average trading day..

I would like to be able to survive market movements for one month, or more precisely, i would like not to face margin call (25% maybe, if i remeber my broker correctly) even if i BUY BRENT and BRENT price will be 50% higher/lower of what i purchased/sold.

What are ways to trade BRENT/OIL with $100 and open lets say 1 year trade without reaching margin call if price goes against me and the OIL price will be approx. 50% plus or minus from time of initial order?

Sorry for my bad english, i am trying my best to explain.


rob559

Member Since Feb 11, 2011  1916 posts rob559 Dec 06 2016 at 08:26
good luck

compuforexpamm

Member Since Aug 20, 2009  265 posts kennyhubbard (compuforexpamm) Dec 06 2016 at 10:04
@andromeda1, if I understand you correctly, you are looking to do some sort of long term trade and you are hoping to ride out any swings that go against you???

I would put it to you that there is no way to eliminate the risk......that is the very nature of forex. Possibly your strategy is not appropriate for the instrument that you wish to trade(OIL) and the account size. With $100, you should seriously be looking at a cent account rather and find a strategy that works with the instruments available(unfortunately, all cent account I have come across have limited trading instruments available).

Anyway, good luck with your plans......

Wealth Creation Through Technology
Janeo

Member Since Sep 14, 2016  18 posts Janeo Dec 06 2016 at 13:38
First thing you need to understand that most of the brokers provide 1 lot of Brent oil as 1000 units i.e. 1000 barrels. So I would suggest to find a broker which takes lower quantity per lot, like 1 lot = 1 barrel. Secondly you can increase your account leverage which will allow you to place more trades as margin used per trade is minimized.
Also I will suggest you to consider the swap charges for Brent oil as well. They may impact you due to less funds. To safeguard your interest you can use few risk parameters to manage your position, there do exist EA's which will notify you if your margin call is about to hit so that you can hedge your position or move accordingly. But crude swaps are sometimes enough to eat your fund.


VickyJones

Member Since Mar 31, 2015  45 posts VickyJones Dec 06 2016 at 13:50
I think that kennyhubbard has a point. The Brent Crude Oil price jumped by about 30 dollars since January 2016 and you will need to monitor your open position often to avoid any possible margin calls. Why don't you test this for awhile on demo to get a good confidence first?

VickyJones

Member Since Mar 31, 2015  45 posts VickyJones Dec 06 2016 at 13:51
@Janeo Very important point about the swaps, indeed!

andromeda1

Member Since Aug 30, 2010  108 posts andromeda1 Dec 06 2016 at 14:06
Janeo posted:
find a broker which takes lower quantity per lot, like 1 lot = 1 barrel.

thx, please how to recognize from the broker website that they takes this lower quantity? Currently im with FXopen, cant!t remember i seen anything like this on their site.

Janeo posted:
increase your account leverage

You mean when i am at 1:200, i should try 1:500 for example?
PS: would like to see difference between old and new leveraged account regarding margin. I can!t imagine how it would look like in MT4.

Janeo posted:
consider the swap charges for Brent oil as well.

You mean that i will pay alot of $ for position open/close in case of OIL right?

thx for valuable input

xgavinc

Member Since May 11, 2011  235 posts xgavinc Dec 06 2016 at 14:15
Keep margin level above 1000%, bellow 1000% = fund account only, above 1000% place a trade. I use this rule on a 700% margin level (little more risk, but I won't get a surprise within a day or even 2 (1:100 leverage), under 500% at the end of the month means I have to fund my account) - make strict rules and stick to them.

@Janeo 'Secondly you can increase your account leverage which will allow you to place more trades as margin used per trade is minimized.' - not good advice. I went from 1:1000 to 1:100, I lost thousands on high leverage (looks good, go to bed, wake up, wiped account), on 1:100 I can sleep at night. More trades (especially on one symbol) exponentially increases risk. Good advice on swaps... the little gremlins that nibble at your account every night.

For every loss there should be at least an equal and opposite profit.
tormess

Member Since Jun 15, 2015  52 posts Torsten (tormess) Dec 06 2016 at 15:51
I also agree with the comments about swaps importance. For such long term trades this can make a huge difference. When it comes to leverage, I consider anything higher than 1:50 for oil quite risky but a good point was mentioned also about the size of the lot (1, 10, 100 or more barrels) as this is the ratio you use to calculate the value of your trade.

@andromeda1 if you don't find info on the website, just ask the support via chat or email smiley

rob559

Member Since Feb 11, 2011  1916 posts rob559 Dec 07 2016 at 07:14
Janeo posted:
increase your account leverage
You mean when i am at 1:200, i should try 1:500 for example?
PS: would like to see difference between old and new leveraged account regarding margin. I can!t imagine how it would look like in MT4.


you need to learn before trading,you are doomed to failure as hundred of wannabes traders ready to make a quick buck without learning anything, the is a category for that (lazy category)

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