Ur Funds Vs Ur Brokers. | Page 2 | Forex Factory

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Ur Funds Vs Ur Brokers.

  • #21
  • Sep 24, 2006 8:25am Sep 24, 2006 8:25am
Quoting twinchell
Great ideas guys. I am ashamed to say I have never thought about this. LOL.
Hi Twinchell,

I m glad to hear that u have taken ur ForexTrading Business seriously, considering Fund-Safety as ur Primary Priorities.

U don't have to feel ashamed, for not given a thought on this thing b4. Acutualy u know wat, there are abt more than 70% of ForexTraders who just get atracted towards the huge gains of ForexTrading and Fund their accounts with say $1000 or something and they just Forget abt the Fund-Safety thing.

Actualy u know we are more then 2500 ForexTraders coming to this ForexFactory Website... rite...!
Just imagine if all of us just take 1-min to put down Broker's Name and Their Fund-Policy. How helpful would it be to all the traders to find all the Info in one Good Thread and choose a Broker for themselves.

All one has to do is answer to question give blw.:

1) Ur Broker's Name : ____________________

2) Ur Broker's Fund-Safety Policy: __________________

(I hope each trader takes this oppurtunity to share with us their views on the abv 2-Ques.)
  • #22
  • Sep 25, 2006 6:59pm Sep 25, 2006 6:59pm
Quoting diallist
Hi Kev,

I keep the majority of my trading account in a secure personal bank account insured by FDIC.

I only keep enough in my brokerage account to cover margin requirements and to allow trades a bit of room to swing. Everytime I've built up a nice amount of profits, I withdraw it from my brokerage account and deposit it into my insured bank account.

If the broker goes bust, I've only lost what little was in the brokerage account. The majority of my account is safe in the bank.

Simple example: If I have $10,000 to trade with, then $8,000 goes in the bank and $2000 goes in the brokerage account. Your position size would be calculated on the entire $10,000, and not just the $2,000. This makes sense because it is only one bankroll, but stored in two places.

To keep the amount you have to put in the brokerage account to a minimum, you should use the highest leverage your broker will allow. This will minimize your margin requirements and allow you to keep less money in your brokerage account and more of it in your bank account.

Does this make sense?

Dial
Hi Dial,

It makes sense that u keep ur lager %age in the bank insured by FDIC.

But there is one thing which i didnt get is, if u make $10k with say XYZ broker and then u keep $2k with him in ur Brokers account and take out $8k and keep it in the bank,
then how does ur Position size would be calculated on $10k instead of just $2k.
Actualy, it should be calculated on $2k rite ... as tats wat the Amount u have with ur brokers or not..?

Pls clear it would be appriciated.
Thanks
  • #23
  • Sep 25, 2006 9:16pm Sep 25, 2006 9:16pm
<table border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td>Safety of Funds

</td> </tr> <tr> <td colspan="2" background="images/dot_line.gif" height="8">http://www.fxuniversal.com/images/spacer.gif</td> </tr> </tbody></table> All FX Universal client funds are deposited with FX Solutions, a registered Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA). Commodity Futures Trading Commission (CFTC) has jurisdiction over all Futures and Forex activity. When trading in the foreign exchange markets, individuals should only trade with a CFTC registered entity, such as FX Solutions.





get 'em from http://www.fxuniversal.com/safety-of-funds.html


IB for fxsol
  • #24
  • Last Post: Sep 26, 2006 11:01am Sep 26, 2006 11:01am
Quote
But there is one thing which i didnt get is, if u make $10k with say XYZ broker and then u keep $2k with him in ur Brokers account and take out $8k and keep it in the bank,
then how does ur Position size would be calculated on $10k instead of just $2k.
Actualy, it should be calculated on $2k rite ... as tats wat the Amount u have with ur brokers or not..?
It doesn't matter what the amount you have with your broker, it only matters what the amount you have to "trade" with.

If you have $10,000 available to trade with, using the 5% rule, you'd be trading about $25 pips (5% of $10,000 = $500, with a 20 pip stop loss = $25 per pip). Now keep in mind that everybody has their own level of risk/money management, and the above is just for example purposes.

You don't need $10,000 in your broker account to trade $25 pips, especially if you move the leverage up to 400:1. It's not a matter of risking more or less based on the trades you make, it's about keeping your money safe from Broker situations beyond your control, like a bankruptcy.

You'll still gain or lose the same amount trading but the majority of your money will be safely put away in case the Broker decides to pull a fast one.

Does that help?
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