Old-Fashioned Bank Account Forex Trading?

Is any trader still trading this way? I'd prefer not to trade on leverage, so this seems to be a safer way. Any comments on this approach are appreciated.Thank you!rudenstein

If you don't use any legerages at all, how much money can you make? $4 a month? $60 a year?

Dude, you need a lot of money to trade without any leverages. If you don't you will make $60 a year and have to live like a hobo.

rudenstein

u are in to sommething in that way u have control and u know all that to get rich in a hurry is far away unles u offcourse have a big account.i trade max gearing of 3 times my own money.

revoke

typical bank spread for exchange can be around 30pips to 80pips.. board rates are further marked up. we call this elephant spreads..

I don't call this trading.

That's simply not true. You can make a lot of money with low leverage (low means for me 1:1 up to 3:1). In good months I'm able to make about 20-30% using that low leverage.

You can always trade with low leverage with any broker. Don't get blended from 500:1 accounts. If you have a $10k account just use a lot size of 0.1 (mini lots). That way you trade with a leverage of 1:1 (in case of a XXX/USD pair).

Regards - Xaron

If you have $1M and decided to trade forex with a bank buying selling other currencies:

Step 1: You SOLD 1M USD and bought 500K GBP @ 2.000
Step 2: You SOLD 500K GBP infavor of USD @ 2.0800 - 800 pips profit

Lets count how much you made.

500K GBP * 2.0800GBP/USD = 1,040,000USD

40K Profit / 800 pips / 1M

or equivalently,
USD 0.00005 per pip per USD of capital.

This is assuming that you trade 100% of your equity! And if you trade only a portion of it, then your profit margin will drop significantly as well.


A lot of people fail or simply refuse to realize that RISK is not associated to Leverage but to the number of LOTS one trade.

Question 1:
What is the risk on a $1M account, 500:1 leverage, if you were to trade 1 standard lot?

Question 2:
What is the risk on a $1M account, 1:1 leverage, if you were to trade 1 standard lot?

Answer to both question: SAME!

===================================================
Here is another situation:

Question A:
What is the risk on a $10K account, 100:1 leverage if you were to trade 1 standard Lot?

Question B:
What is the risk on a $1M account, 1:1 leverage if you were to trade 1 standard lot?

Answer: $1M account has more risk.
This should be obvious: with so many brokers refusing withdrawals, $1M is a big reason not to remit money back to you!

I'm a newbie on a demo account. What's the meaning of the statement, "so many brokers refusing withdrawals?" Do brokers really refuse withdrawals? How can that be, it's your money. Are those just the smaller brokers?

Thanks in advance,
Marcy

BurgerKing,

It seems to me that some of your comments don't make sense:

1. How can Leverage not be associated with risk. If your leverage is 1:1 you can possibly keep a position open without having to worry about a margin call.

2. You mentioned that a $1M would be a good reason for a broker to keep your money from you. I was actually talking about trading forex with a normal bank account.

Please comment if you disagree.

thank you

rudensteiner

Hi rudensteiner,

You've received a lot of bad information in this thread.

If you want to get a clear and correct picture of the relationships between risk, stops, broker leverage, true leverage and margin requirements and see how all these elements are interrelated, go take a look in the beginner's forum at my sticky thread called information for beginners. Read posts 18 thru 36 and you'll come away with the right knowledge.

The thread is here: http://www.forexfactory.com/showthread.php?t=6948

Now the quick answer to your question is this:

If you want to trade with no leverage (and there is nothing wrong with this at all), then simply match your position size to your account size.

True Leverage = Position Size / Account Size

So, if you have a $10,000 account you can put on a single mini lot (10000 units) or 10 micro lots (1000) units.

Unless you have at least $40,000 in your account you are much better off using micro lots for the resolution they give. This is explained fully in the sticky I mentioned above.

Now, what if your account is an odd size like $6287?

In that case, you could either use 6 micro lots or 7 micro lots which would put your leverage at a bit less than 1:1 for the former and a bit more than 1:1 for the latter.

Please do read my sticky. It will make far better sense than the replies you've received here so far.

Dial

30-80 pips!?!? What is their rational for that?

Me + 80 pips spread = suicide.