Position Size to Reasonably Ensure Profit Level Receival | Forex Factory

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Position Size to Reasonably Ensure Profit Level Receival

  • #1
  • First Post: Jun 10, 2018 12:56pm Jun 10, 2018 12:56pm
Hello all.

I have one doubt. I know that trading 1000 dollars involves no issues on average market circumstances, when market is flowing without too much volatility, and that take profits are paid at the preset level without noticeable slippage.

I would like to know how much it changes while position size increases and if there is a way of having an estimation about it.

For instance, let's say that I open one EURUSD position of size 10,000 dollars, or 100,000 dollars or 1,000,000 dollars.

I would like to know how those magnitudes will impact on slippage and the way that the brokers will fill my orders.

Kind Regards.
  • #2
  • Jun 10, 2018 9:42pm Jun 10, 2018 9:42pm
Quoting scherzi
Hello all. I have one doubt. I know that trading 1000 dollars involves no issues on average market circumstances, when market is flowing without too much volatility, and that take profits are paid at the preset level without noticeable slippage. I would like to know how much it changes while position size increases and if there is a way of having an estimation about it. For instance, let's say that I open one EURUSD position of size 10,000 dollars, or 100,000 dollars or 1,000,000 dollars. I would like to know how those magnitudes will impact on...
That's what demo is for, testing, anyway, don't worry about it until you get there!

Professional traders use ECN broker, or so I'm told

Good luck
It takes a lot for me to IGNORE you, but you can try.
  • #3
  • Edited 11:15pm Jun 10, 2018 10:56pm | Edited 11:15pm
Quoting Erebus
{quote} That's what demo is for, testing, anyway, don't worry about it until you get there! Professional traders use ECN broker, or so I'm told Good luck
Question was "I would like to know how those magnitudes will impact on slippage and the way that the brokers will fill my orders." and your response is "Test in Demo" really?

No need to respond... I will delete this post as I can no longer deal with red flag idiots. It is just depressing to carry a red flag out here :-(

Edit: Sorry, just to get a return on my time spent typing this post....OP - Please search the Factory for "TradingCostMultiple". It will give you the details on HOW to accurate test your strategy in DEMO to prove that trading costs are recovered first and foremost before you go live. I got pissed on Erebus (Sorry, I will go ahead and edit this post in a bit) because Slippage is the ONLY thing that cannot be tested in demo environment... and my Solution of tagging a TradingCostMultiple addresses how to simulate and recover slippage costs in DEMO.
Staying in my lane...
  • #4
  • Jun 10, 2018 11:32pm Jun 10, 2018 11:32pm
Quoting VEEFX
{quote} Question was "I would like to know how those magnitudes will impact on slippage and the way that the brokers will fill my orders." and your response is "Test in Demo" really? No need to respond... I will delete this post as I can no longer deal with red flag idiots. It is just depressing to carry a red flag out here :-( Edit: Sorry, just to get a return on my time spent typing this post....OP - Please search the Factory for "TradingCostMultiple". It will give you the details on HOW to accurate test your strategy in DEMO to prove that trading...
good for you, self righteous know it ALL
It takes a lot for me to IGNORE you, but you can try.
  • #5
  • Edited 3:07am Jun 11, 2018 2:09am | Edited 3:07am
Hello, my question is not about paper trading, but about real testing. I have already used demo testing with MT, Python, C# and also Forex Tester too among others. Even built statistical models with sklearn, tensorflow, etc for this purpose.

I am already knoledgeable at that. Since I can see now my skills start seeming profitable after a few years of preparation, I have started with live accounts. My question is regarding live trading.

Let's say I use an ECN broker, do you know if is there a safe maximum amount to trade or there is not such thing? I know brokers allow limited maximum position sizes, this is not my question.

My concern is this one:

As a retail trader, I would assume that since my positions are small compared to the big players, that my orders would be filled at, more or less the levels they are triggered, since the market has a lot of liquidity. Is that a valid assumption?

Do you have issues with your orders being filled when venturing over a particular threshold? 1 lot, 10 lots, 20 lots or something?

The reason for this interest is to plan how much money I could produce by daily trading through knowing how much should I expect to be able to put in per trade.

Look at the next figure where the situation is depicted:
Attached Image (click to enlarge)
Click to Enlarge Name: ForexFactory_LiquidityFigure.png Size: 275 KB


Let's suppose I open a position at the entry level of the figure, and that the entry level was set to 1.8. Then prices rally up and I finally close my trade at level 1.82.

I know that if I have just entered long with 0.01 lots I would not have to care too much about slippage and that level in normal conditions because I will likely find enough demand for such a small position size of 0.01 lots.

But, would it be the same with 0.1 lots? And with 1 lots? And with 25 lots?

And how does that apply to both ECN and market maker brokers? Is there enough liquidity to fill the orders within a reasonable price range such as 5/10 pips provided a theoretical mean spread of 1 pip for instance?

Another way to address my concern is, how much money could I expect to be able to place per trade so that my orders are satisfied within reasonable ranges?

Or, for a position size of N lots, which is the better timeframe? If the 5M EURUSD timeframe bar size is about 100 pips, which lot size would be reasonable here so I do not get an average slippage of 10% the bar range (10 pips slippage in the example). If the 1H bar is ranging 300pips, how much to have a maximum slippage of 30 pips to get all my order filled, or does 3 pips make sense instead since there is an enormous liquidity at any lot size instead? I don't know the answers to those questions, and I would like to have an idea regarding those to plan accordingly.
  • #6
  • Jun 11, 2018 7:42am Jun 11, 2018 7:42am
some brokers show an order book and you can see where the buy and sell orders are concerning prices and volume.
  • #7
  • Jun 11, 2018 8:01am Jun 11, 2018 8:01am
Quoting yonnie
some brokers show an order book and you can see where the buy and sell orders are concerning prices and volume.
Good information. Thank you for it.
  • #8
  • Jun 11, 2018 8:14am Jun 11, 2018 8:14am
Quoting scherzi
Hello, my question is not about paper trading, but about real testing. I have already used demo testing with MT, Python, C# and also Forex Tester too among others. Even built statistical models with sklearn, tensorflow, etc for this purpose. I am already knoledgeable at that. Since I can see now my skills start seeming profitable after a few years of preparation, I have started with live accounts. My question is regarding live trading. Let's say I use an ECN broker, do you know if is there a safe maximum amount to trade or there is not such thing?...
1) there is no such thing as a safe amount to fly under the radar. its very simple actually. either way u cut the cake, at the end of the day someone has to make a market/counterparty for you. be it the broker/lp. if u are small, broker can afford to be your counterparty. so they will. once u go big and they cannot afford to, a lp/pb/pop will take over. which way a trade is booked is dependant on the brokers/lp's agreement which as a retail u will never know.

2) from a lp/pb/pop's pov. the more trades they book. the more risk they undertake, as such they will then have to countersell u dead or hedge on futs/opts. (whichever it is, u as a retail will also never get to know)

3) the only thing u need to be concerned about is slippage. not the brokers/lp's fault. there is something called "top of book" as brokers are receiving feeds from multiple lps. they often only reflect best bid/ask. HOWEVER. what u might not know is that, that price has only a limited quantity behind it, some call it level 2 dept of liquidity.

so assuming u are entering a $10,000,000 trade. u will probably receive a significant slippage of 3 tiers and more. because u have scooped up the top of book to the 3rd level. this will be a issue if u are a scalper.
  • #9
  • Jun 11, 2018 8:47am Jun 11, 2018 8:47am
Quoting Bicarus
{quote} 1) there is no such thing as a safe amount .....
That is what I was wondering about, yes. I have made a small research with the "top of book" keyword and found a few interesting links that talk about the liquidity tiers too.

Great information too, thank you.
  • #10
  • Sep 24, 2018 1:54pm Sep 24, 2018 1:54pm
Quoting scherzi
Hello, my question is not about paper trading, but about real testing. I have already used demo testing with MT, Python, C# and also Forex Tester too among others. Even built statistical models with sklearn, tensorflow, etc for this purpose. I am already knoledgeable at that. Since I can see now my skills start seeming profitable after a few years of preparation, I have started with live accounts. My question is regarding live trading. Let's say I use an ECN broker, do you know if is there a safe maximum amount to trade or there is not such thing?...
Hi Scherzi,
This is not really about what you were asking, sorry for that, but I read that you were using FOREX TESTER.
I am doubting of buying it, but since it is a bit expensive 299$, I am doing some research before I do. Could you tell me your experience. I have tried the demo version and it looks fine. I wanted to ask : Is it correct if I want to be able to work the H4 charts, that I need to pay extra each month?
I think with the licence of 299$ they only let you work the D1 charts and higher. Is that correct?
Thank you
  • #11
  • Sep 24, 2018 2:07pm Sep 24, 2018 2:07pm
Quoting felipe6
{quote} Hi Scherzi, This is not really about what you were asking, sorry for that, but I read that you were using FOREX TESTER. I am doubting of buying it, but since it is a bit expensive 299$, I am doing some research before I do. Could you tell me your experience. I have tried the demo version and it looks fine. I wanted to ask : Is it correct if I want to be able to work the H4 charts, that I need to pay extra each month? I think with the licence of 299$ they only let you work the D1 charts and higher. Is that correct? Thank you
Hello Felipe (hola, qué tal).

I have purchased https://soft4fx.com/software/mt4-trading-simulator.php because it is integrated with Metatrader and the testing tick-data is free.

So I would recommend you to get it instead of forex tester.

It only works if you have an internet connection anyway because it makes a check. But I have used it intensively for months and I am very happy of it.

Besides, it also has a free version that can use data from your metatrader account on your broker. But I think it is worth getting the paid version.

I use this always to practice my strategies until they are profitable. Doing this and then reviewing my trades in live account are the two things that allow me to improve and learn. Live trading is very different from non-live indeed due to the psycological aspect of trading which is very hard to overcome.

Best luck.
  • #12
  • Sep 24, 2018 2:52pm Sep 24, 2018 2:52pm
Quoting scherzi
{quote} Hello Felipe (hola, qué tal). I have purchased https://soft4fx.com/software/mt4-trading-simulator.php because it is integrated with Metatrader and the testing tick-data is free. So I would recommend you to get it instead of forex tester. It only works if you have an internet connection anyway because it makes a check. But I have used it intensively for months and I am very happy of it. Besides, it also has a free version that can use data from your metatrader account on your broker. But I think it is worth getting the paid version....
Thank you very much for your quick answer.
About the simulator of Soft4fx I have considered that one too. Does the fact that it works inside metratrader affect your normal trading within that platform? Can I still trade normually in mt4 while I have some screens open with that simulator? I am a bit worried about that. Forex tester works outside the platform.
The Soft FX simulator is only 99 $ with no extra fees.. a lot cheaper than the 299$ with extra fees for extra data with Forex Tester 3.
I already work with live accounts but want to backtest a lot more, using a simulator, because I am a bit tired of filling books with backtesting.
And one last thing : can I switch between timeframes while backtesting? I mean within the same simulation??
  • #13
  • Sep 24, 2018 3:08pm Sep 24, 2018 3:08pm
Quoting felipe6
{quote} Thank you very much for your quick answer. About the simulator of Soft4fx I have considered that one too. Does the fact that it works inside metratrader affect your normal trading within that platform? Can I still trade normually in mt4 while I have some screens open with that simulator? I am a bit worried about that. Forex tester works outside the platform. The Soft FX simulator is only 99 $ with no extra fees.. a lot cheaper than the 299$ with extra fees for extra data with Forex Tester 3. I already work with live accounts but want to...

Does the fact that it works inside metratrader affect your normal trading within that platform?
Ok, I work as soft engineer so the reason about how I will answer you now.
It depends on your system's RAM. I think MT4 uses 1Gb (I know it because I have one VPS with MT4 running just in case I have a power issue at home or something like that).


Can I still trade normually in mt4 while I have some screens open with that simulator?
You can, but imo you should not do it.
Maybe you can install a second instance of metatrader and be safe. You can do it with same broker terminal but it is not straightforward so google: "how to install two instances of metatrader" to avoid issues.


can I switch between timeframes while backtesting? I mean within the same simulation??
Yes, but not on the same chart. You can add as many charts as you neede, even custom charts (tick charts and other stuff) but they are separate offline charts meaning the lines and objects on one chart won't appear on the other charts.
  • #14
  • Last Post: Sep 24, 2018 4:36pm Sep 24, 2018 4:36pm
Quoting scherzi
{quote} Does the fact that it works inside metratrader affect your normal trading within that platform? Ok, I work as soft engineer so the reason about how I will answer you now. It depends on your system's RAM. I think MT4 uses 1Gb (I know it because I have one VPS with MT4 running just in case I have a power issue at home or something like that). Can I still trade normually in mt4 while I have some screens open with that simulator? You can, but imo you should not do it. Maybe you can install a second instance of metatrader and be safe. You can...
Thanks a lot Scherzi Very kind of you helping me out.
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