Attachments: Position sizing becomes Absurd

Position sizing becomes Absurd

#1
First Post: Aug 18, 2020 2:45pm Aug 18, 2020 2:45pm

fuadik88
| Joined Aug 2020 | Status: Trader | 145 Posts

Hello, I need help about position sizing under 1:30 leverage. Assume that I'm risking 1% per trade. And usual stop-loss ranging from 4 to 8 pips. Trading capital is 100.000$. So simply calculate lot size 100.000*1%= 1000$ . 1000$/50(stoploss amount (point, 5digit))=20 . Now 20 lots is a bit absurd position size. Also it eats 70% of margin so I'm not able to maintain another trade, only 1 trade at a time. While capital getting bigger, this become serious problem in terms of using tight stop-loss. How can I deal with this case? Thanks in advance.

Because of my country, sometimes brokers don't regulate me under FCA, redirect to offshore regulated part of website. And swiss brokers also have leverage limitations to 1:30 in case of FCA regulation or ESMA rules. So cost of top-tier regulation for me is to be limited to 1:30 leverage. Otherwise, I need to open account under offshore regulators of ASIC or FCA brokers to get 1:100 leverage.

And at the end, who knows is it as safe to be onboarded under offshore regulation of specific broker, if it's top-tier regulated and reliable, but cannot onboard me under top-tier regulation? Thanks again.

#2
Aug 18, 2020 3:35pm Aug 18, 2020 3:35pm

fxlikeaboss
| Joined Jun 2020 | Status: Trader | 16 Posts

Hello,

It seems to me you only have 3 options:

Pick a broker that offers more leverage (even if it means going offshore)
Risk less per trade
Increase your stoploss a bit (which would also reduce your lot size/risk)

Splitting your trades into multiple positions won't change anything because the amount of margin you use will stay the same.

Good Day Sir!

#3
Aug 19, 2020 4:28am Aug 19, 2020 4:28am

fuadik88
| Joined Aug 2020 | Status: Trader | 145 Posts

Quoting fxlikeaboss

Disliked

Hello, It seems to me you only have 3 options: Pick a broker that offers more leverage (even if it means going offshore) Risk less per trade Increase your stoploss a bit (which would also reduce your lot size/risk) Splitting your trades into multiple positions won't change anything because the amount of margin you use will stay the same.

Ignored

Thank you for your answer, sir. I'm thinking to do as you say. And also do you know something about my last question? Being onboarded under offshore regulation of the reliable regulated broker? Will it more likely to change behaviour of broker towards me? Thanks again.

#4
Aug 27, 2020 12:15pm Aug 27, 2020 12:15pm

Brannel
| Additional Username | Joined Feb 2020 | 36 Posts

I don't see a problem with a small leverage, because it actually looks much safer. In fact, your brokerage company has set you a hard frame, on the other hand, it will protect you from some abrupt movements and thoughtless decisions. In addition, you are working with a regulated brokerage company - in my opinion, this is a really good solution. It seems to me that now you are more concerned that you are making the wrong profit. Yes, each of us has faced that. Yes, this is not the most pleasant news. But believe me, it's much better than losing all or most of your capital because of one thoughtless decision. So don't worry, in time the capital will grow and everything will be fine.

#5
Aug 27, 2020 12:46pm Aug 27, 2020 12:46pm

havo
Joined Jan 2016 | Status: Trader | 549 Posts

Quoting fuadik88

Disliked

Hello, I need help about position sizing under 1:30 leverage. Assume that I'm risking 1% per trade. And usual stop-loss ranging from 4 to 8 pips. Trading capital is 100.000$. So simply calculate lot size 100.000*1%= 1000$ . 1000$/50(stoploss amount (point, 5digit))=20 . Now 20 lots is a bit absurd position size. Also it eats 70% of margin so I'm not able to maintain another trade, only 1 trade at a time. While capital getting bigger, this become serious problem in terms of using tight stop-loss. How can I deal with this case? Thanks in advance....

Ignored

Open an account with an australian broker (a few well know and regulated, no problem picking one) and tell them to move you offshore, then you can get all the leverage you want..

Also dont listen post #4 thats the worst advice ever, lots of "noob" in his words

#6
Aug 27, 2020 1:59pm Aug 27, 2020 1:59pm

fuadik88
| Joined Aug 2020 | Status: Trader | 145 Posts

Quoting havo

Disliked

{quote} Open an account with an australian broker (a few well know and regulated, no problem picking one) and tell them to move you offshore, then you can get all the leverage you want.. Also dont listen post #4 thats the worst advice ever, lots of "noob" in his words

Ignored

I don't understand why people claim lower leverage is safer, I think higher is always better. If someone doesn't know what's lot and how to calculate risk, opening 30 lot trades in small deposit using leverage, they are doomed to lose. I want higher leverage to just maintain 3 positions comfortably. My risk is always 1%.

#7
Aug 27, 2020 7:46pm Aug 27, 2020 7:46pm

havo
Joined Jan 2016 | Status: Trader | 549 Posts

Quoting fuadik88

Disliked

{quote} I don't understand why people claim lower leverage is safer, I think higher is always better. If someone doesn't know what's lot and how to calculate risk, opening 30 lot trades in small deposit using leverage, they are doomed to lose. I want higher leverage to just maintain 3 positions comfortably. My risk is always 1%.

Ignored

Exactly, and its just not the leverage, IF the market goes agaisnt you half your stop loss you can be stopped out by margin call, add the stupid low leverage and the high margin needed to place any semi decent trade and its clear that those new "regulations" are just there to kill the trader but a noob trader hardly understand this from a lack of experience

But anyway, my point still stand, find a good australian broker, open an account there and talk to your account manager and tell him/her you want to be moved offshore to get a higher leverage; they will understand and will do it in a hearbeat

Since this crappy regulations came into effect i did that transfer; long time and tons of withdraws later, not a single problem yet =)

#8
Aug 27, 2020 9:52pm Aug 27, 2020 9:52pm

maahome
Joined May 2013 | Status: Trader | 581 Posts

Don't know what country you are from as this may impact which brokers allow you access in Australia. Looks like Central eurasia maybe. Number of well regulated brokers are available but bear in mind various issues with depositing etc etc. Not all brokers are equal in this respect, first to come to mind is Axitrader - they are based in Australia but you cannot fund direct via an Australian bank/credit card unless you go via a wire transfer via London or currency exchange via credit card - both incur fees so not cheap. I found this out the hard way