Annoying Precision
Overseas brokers for US citizens: legal or illegal? 22 replies
Any brokers offering high leverage accounts to US citizens? 22 replies
Broker offering penny accounts to US citizens? 1 reply
I am not able to create virtual accounts anymore 7 replies
CFTC NEW Document - Overseas Accounts OK? 58 replies
DislikedOh, there's also no hedging allowed in the U.S. either, including all this FIFO nonsense which was added, and that sucks too.Ignored
DislikedFYI, there are strategies where hedging and FIFO are not needed/useless. Some of them are far more profitable and stress-free. Don't stop searching and learning.Ignored
DislikedNot really. I trade on margin. Margin is set at 50:1. I don't need multiple ways to talk about the same thing - I don't need a definition for "true leverage" if it is not useful to me. Its not worth my time. All I need to know is how my margin affects my risk and to trade within risk parameters that I control.
The Eskimos might have 65 different words for "snow" - I've just got "snow" and that's all I need.Ignored
DislikedNo worries... I'm just having some fun. And, I just realized English might be your native language?Ignored
Disliked
I just can't expect to see the high returns I was looking forward to ...Ignored
Disliked
According to pipmutt and Billflet, they determine how fast your account balance goes down when you make a loss PROVIDED that you take MAXIMUM margin given by your broker. And this is they feel what contributes to the high failure rate in the high-leverate trading in Forex.Ignored
Disliked
So now at 50:1 leverage, the account size becomes $4,000 (200,000 / 50) with The Fool still trading 2 standard lots.
margin rate of 100:1....So for 200,000 trade size, The Fool is only putting up $200,000/100 = $2,000 of his own money.Ignored
DislikedThere could be ... I was just working with the tools that were made available, and now they want to take them away.
Oh, I just configured and backetested my EA last night and yielded about 4,000 percent in three months (i.e., $4,000 on initial deposit of $100). The only problem I'm really having is when major upswings and downswings in the market occur, such as it's been over the last year or two. This is where the hedging strategy comes in, and my main reason for finding an account overseas.Ignored
DislikedAnyway can't you have two accounts, use one for those major swings?Ignored
DislikedHow so? By hedging against the other account when it looks like it's beginning to happen? Yeah, that might work. The only problem with that is I have to maintain enough money in both accounts because technically it's not considered a hedge, at least not as if it were in same account, and won't protect me from any margin calls as if it were. An alternative might be to transfer the funds from one account to the other if the funds in one account were getting too low ... which, of course is contingent upon your broker and their willingness to do so...Ignored
DislikedI don't know your strategy so this might not work but how about trading inversely correlated pairs ie EUR/USD and USD/CHF?Ignored
Disliked
I will answer you: According to pipmutt and Billflet, they determine how fast your account balance goes down when you make a loss PROVIDED that you take MAXIMUM margin given by your broker.Ignored
DislikedSorry to bring this up. Did you consider that in your first example where the fool's account is $200,000 and he risks 1% or $2000 dollars trading two standard lots, using no leverage the market would have to move 100 pips against him to stop him out?
In the example of risking 1% of his $4000 account ($40 dollar risk), leveraged at 50:1 using the same 2 standard lots the market would only have to move 2 pips to stop him out, and that's ignoring the spread.
In both cases he risked and lost the same percentage of account. But 1 case took 100...Ignored
DislikedWhen you increase the leverage and maintain the same percentage of account risk, market movement will take you out quicker and in direct proportion to the amount of leverage used.Ignored
Disliked
Oh, I currently have an account with IBFX already (actually two), and they have it set up so this FIFO business is transparent. So you can open and close your trades in whatever order you chose. It doesn't even affect your EA's, and that's kind of cool.Ignored
DislikedBefore you go any further, I will say this. I do agree I did overlook the practicality of it and I am glad you brought this point up. I didn't have a chance to respond until now.
Yes on theory, this trader is controlling the risk effectively but in practice, he is also in effect stopping himself short. And I am glad now this can be illustrated, along with the mathmatics, that:
Yes this example does prove, although not completely undoable, it is very very difficult for a small investors who have limited funds and is relying on high...Ignored