To use chat, please login.
Back to contacts

How to reduce risks of margin call with small balance?

CarlosMZ (CarlosMZ)
Dec 07 2016 at 07:16
55 mensajes
@andromeda1 Why did you chose to trade the brent oil at first place?

togr (togr)
Dec 07 2016 at 07:52
4862 mensajes
Go back to demo trading.
If you are profitable deposit at least 1,000 and trade the same way
If you are not, dont trade real

lee42747 (lee42747)
Dec 07 2016 at 16:02
49 mensajes
rob559 posted:
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)


You know what? I think here you are absolutely right! I read a lot of topics where people calling themselves 'newbees' are waiting for others to give them the clue instead of spending enough time on demo testing and doing the match themselves.

andromeda1
Dec 08 2016 at 00:11
108 mensajes
thx for the info. REGARDING SWAP WARNING
when i right click BRENT symbol in my FXOpen ECN Pro MT4, select Specification, i see the Swap on long position is -33 USD, short is +24USD.
Contract size is 1000 (barrels? which means 1 lot is 1000 barrels?), tick value is 10.0
----
When i want to calculate how much i loose/gain when i trade BRENT over night, i use calculator https://www.fxpro.co.uk/trading/calculators/swap
In the calculator i see that if i set 'Trade size' to 10 (barrels) because i trade 0.01 and it is 100 times smaller than 10 000 which seems to be volume set by my broker.., result is this Swap (fee) per one trading day when trade is open:
-0.33 USD
+0.24 USD

So does it mean that if i buy BRENT with $100 account balance and 0.01 lot, after 303 days it would eat my $100 account if BRENT price not changed and wipe it 50% faster if BRENT price decreased by 50% (low margin)?
=======================
REGARDING LEVERAGE CHANGE
Janeo mentioned that if i increase leverage, (from 1:200 to 1:500 for example) then i will be able to place more trades because margin will be decreased. But xgavinc have opposite experience regarding leverage effect on margin. Torsten adviced leverage below 1:50...

When i opened SELL 0.01 lot on my $100 account with leverage 1:20, EUR/USD pair i am getting:
margin 53.79 USD
free margin:49.17 USD
margin level: 191.40 %
(xgavinc adviced 1000%+ margin level 😲, how can i have it?)

xgavinc
Dec 08 2016 at 07:54
235 mensajes
andromeda1 posted:
When i opened SELL 0.01 lot on my $100 account with leverage 1:20, EUR/USD pair i am getting:
margin 53.79 USD
free margin:49.17 USD
margin level: 191.40 %
(xgavinc adviced 1000%+ margin level 😲, how can i have it?)


That means you are under capitalized. On higher leverage you can open more trades, but more trades equal more risk, so you want to increase leverage to increase your risk?

Put leverage on 1:100 (Maximum), then you would need to concentrate on just funding your account (if you keep it over 700% margin level you should be ok for any 'longer' term eventualities, under 700 = fund account when you can, no new trades, over 700 = you are allowed to open a new 0.01 trade). Your concentration should be shorting oil only, as you have a longer term outlook, you want swaps to work for you not against you - you wouldn't invest money at the bank for 3 years at a negative interest rate, so don't do it here. Remember also, swaps Wednesday nights are triple to make up for weekends.

For every loss there should be at least an equal and opposite profit.
xgavinc
Dec 08 2016 at 08:02
235 mensajes
As an added tip for any other new traders, if you are under capitalized (< $1000), keep leverage as low as possible, but open a micro account instead (cent account) of a standard account. A standard account with high leverage and under-capitalization is a recipe for disaster. Don't look for excuses to trade more, look for solutions to protect what you have - there is no worse feeling than trading for a year or two and losing it all within one day.

For every loss there should be at least an equal and opposite profit.
togr (togr)
Dec 08 2016 at 08:45
4862 mensajes
xgavinc posted:
As an added tip for any other new traders, if you are under capitalized (< $1000), keep leverage as low as possible, but open a micro account instead (cent account) of a standard account. A standard account with high leverage and under-capitalization is a recipe for disaster. Don't look for excuses to trade more, look for solutions to protect what you have - there is no worse feeling than trading for a year or two and losing it all within one day.


@xgavinc
With all the respect I do not recommend low leverage for small account.
I do recommended to protect account with stop losses instead of leverage.
With low leverage possibility to solve many situations is limited.
Once I wrote topic here where I described it in details.

xgavinc
Dec 08 2016 at 09:07
235 mensajes
togr posted:
xgavinc posted:
As an added tip for any other new traders, if you are under capitalized (< $1000), keep leverage as low as possible, but open a micro account instead (cent account) of a standard account. A standard account with high leverage and under-capitalization is a recipe for disaster. Don't look for excuses to trade more, look for solutions to protect what you have - there is no worse feeling than trading for a year or two and losing it all within one day.


@xgavinc
With all the respect I do not recommend low leverage for small account.
I do recommended to protect account with stop losses instead of leverage.
With low leverage possibility to solve many situations is limited.
Once I wrote topic here where I described it in details.


Yes, it doesn't solve all the problems, however, here you have a trader with a medium to long term outlook (sounds like more to do with investing than trading), what I'm trying to attempt is for this trader to be able to sleep at night, the higher the leverage the quicker a negative move makes an impact. At a high leverage, low capitalization and what seems to be a standard account, he can experience a ok position before going to bed to margin call during sleep. That is the point I'm trying to get through, it's advice, whatever other measures the trader implements to protect capital is up to them, but why patch an already bleak outlook... 1. he is under capitalized, 2. for a standard lot account (fix that and leverage becomes less of an issue).

I have $100, my first plan would be a cent account, then I will think of leverage. Would you seriously take $100, standard account at 1:500+ leverage? I can't believe the great vontogr would do that 😁

For every loss there should be at least an equal and opposite profit.
togr (togr)
Dec 08 2016 at 09:21
4862 mensajes
xgavinc posted:
togr posted:
xgavinc posted:
As an added tip for any other new traders, if you are under capitalized (< $1000), keep leverage as low as possible, but open a micro account instead (cent account) of a standard account. A standard account with high leverage and under-capitalization is a recipe for disaster. Don't look for excuses to trade more, look for solutions to protect what you have - there is no worse feeling than trading for a year or two and losing it all within one day.


@xgavinc
With all the respect I do not recommend low leverage for small account.
I do recommended to protect account with stop losses instead of leverage.
With low leverage possibility to solve many situations is limited.
Once I wrote topic here where I described it in details.


Yes, it doesn't solve all the problems, however, here you have a trader with a medium to long term outlook (sounds like more to do with investing than trading), what I'm trying to attempt is for this trader to be able to sleep at night, the higher the leverage the quicker a negative move makes an impact. At a high leverage, low capitalization and what seems to be a standard account, he can experience a ok position before going to bed to margin call during sleep. That is the point I'm trying to get through, it's advice, whatever other measures the trader implements to protect capital is up to them, but why patch an already bleak outlook... 1. he is under capitalized, 2. for a standard lot account (fix that and leverage becomes less of an issue).

I have $100, my first plan would be a cent account, then I will think of leverage. Would you seriously take $100, standard account at 1:500+ leverage? I can't believe the great vontogr would do that 😁


My point is that leverage does limit risk but it limit profit as well.
So I recommend to limit risk via SL
and use high leverage to generate higher profit.

togr (togr)
Dec 08 2016 at 09:21
4862 mensajes
xgavinc posted:
togr posted:
xgavinc posted:
As an added tip for any other new traders, if you are under capitalized (< $1000), keep leverage as low as possible, but open a micro account instead (cent account) of a standard account. A standard account with high leverage and under-capitalization is a recipe for disaster. Don't look for excuses to trade more, look for solutions to protect what you have - there is no worse feeling than trading for a year or two and losing it all within one day.


@xgavinc
With all the respect I do not recommend low leverage for small account.
I do recommended to protect account with stop losses instead of leverage.
With low leverage possibility to solve many situations is limited.
Once I wrote topic here where I described it in details.


Yes, it doesn't solve all the problems, however, here you have a trader with a medium to long term outlook (sounds like more to do with investing than trading), what I'm trying to attempt is for this trader to be able to sleep at night, the higher the leverage the quicker a negative move makes an impact. At a high leverage, low capitalization and what seems to be a standard account, he can experience a ok position before going to bed to margin call during sleep. That is the point I'm trying to get through, it's advice, whatever other measures the trader implements to protect capital is up to them, but why patch an already bleak outlook... 1. he is under capitalized, 2. for a standard lot account (fix that and leverage becomes less of an issue).

I have $100, my first plan would be a cent account, then I will think of leverage. Would you seriously take $100, standard account at 1:500+ leverage? I can't believe the great vontogr would do that 😁

@xgavinc
details here https://www.myfxbook.com/community/experienced-traders/low-leverage-is-dangerous-why/1194634,1

Por favor inicie sesión para comentar.