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Which would you prefer: increasing lot size or TP size? 21 replies

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ECN Broker with Spreads on E/J under 2Pips, Leverage 1:200, Minimum Deposit $1000 39 replies

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Best leverage and lot size for $1000 deposit

Quoting khurtzky03
Hi, I am a newbie here at Forex Factory. Based on my demo account with an initial credit of $5,000, I will say a risk reward ratio of 1:3. I can have 3 positions to enter the trade leveraging me, with a minimum of $1,400 each trade. What can you say about this? Will a 1 lot per intraday trading compensate me? My goal is to have a atleast a net profit of $800-$1000. Can I do this in a conservative way like a $1,000 deposit? Well I am a newbie after all but will gain knowledge because it is a learning process... Trading is like being an economist....
You mean to have profit of $800 - $1000 per month? That is bit higher target with a $1000 deposit unless you have a hit rate of more than 80% or you should be a pro . Risk may be too high to achieve that.
Quoting r41225
But OP hasn't mentioned anything about 300k, he's mentioned 1k..........I rest my case
hey r4..... yep, your absolutely 100% right...... no where did he mention 300......

some feel it's best to leave the leverage as is..... the reasoning there should be obvious, but if not, mudd explains below.....h

//---

Quoting MuddBuddha
As the accounts grow in equity, I haven't modified the lot size so i can cover more market range....so really, my weekly % would drop every week as the equity grows. Sounds weird, but that's how it works out.
to trade and code, keep both simple... no call to impress....h
Quoting Parox
You mean to have profit of $800 - $1000 per month? That is bit higher target with a $1000 deposit unless you have a hit rate of more than 80% or you should be a pro . Risk may be too high to achieve that.
A minimum deposit of $5,000. 1 lot per day. Is $150 profit/day attainable with this certain amount of deposit?
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,450 Posts | Online Now
Quoting khurtzky03
A minimum deposit of $5,000. 1 lot per day. Is $150 profit/day attainable with this certain amount of deposit?
This isn't the deposit which will make $150 profit/day attainable but your trading.

Anyway, $150/day is 60%/month ... if you can trade consistently (long term) with that kind of results, you should be rich very soon ...
MT4/MT5 EAs/Indicators/Alerts coder
[quote=FerruFx;6441581]This isn't the deposit which will make $150 profit/day attainable but your trading.

Anyway, $150/day is 60%/month ... if you can trade consistently (long term) with that kind of results, you should be rich very soon ...[/QUOT

The fundamentals, the technical, and style will be the keys to a successful trader?
[quote=khurtzky03;6442383]
Quoting FerruFx
This isn't the deposit which will make $150 profit/day attainable but your trading.

Anyway, $150/day is 60%/month ... if you can trade consistently (long term) with that kind of results, you should be rich very soon ...[/QUOT

The fundamentals, the technical, and style will be the keys to a successful trader?

I would like to try this system. So I can quit my day job soon.
Quoting hayseed
hey limprobale..... your probably correct if someone was manually trading.... it would take a long long time..... way too long for me.....

however, manual trading is just not one of my abilities..... i'll screw it up everytime..... so i trade solely with ea's..... it takes me out of the picture..... other than the creation of the ea of course.... now that i can do......

below is a small acccount running a single ea started with i believe 1200..... it has been well documented on another forum..... it is currently over 4000 in less than...
Hayseed,

I'm very new to EAs but this looks like a great place to start.

Would it be possible to know the name of the EA and where it is available, if it is?

With thanks,
Quoting 4Xfactor
Would it be possible to know the name of the EA and where it is available, if it is?,
hey 4x.....the name is Fahrenheit 451...... it is not available.....sorry....h
to trade and code, keep both simple... no call to impress....h
Quoting hayseed
hey 4x.....the name is Fahrenheit 451...... it is not available.....sorry....h
Ok, thAnks.

Best wishes,

P.S. Should you ever change your mind about sharing it, please drop me a PM
Quoting FerruFx
What will make profitable and consistent in the long term is your ability to trade ...
I am watching your posts, most are great one, this part probably I misunderstood, because I see no relationship between "profitable and consistent" and "ability to trade". for example: is somebody is using a low leverage, low risk it will be able to trade very long time, even he is loosing always

Regarding this thread topic, already made an optimisation for myself: here It is based on what is your Win : lose ratio. To be perfect the formula, you will need to cut the result at the max consecutive lose drawn down. Eg: if the formula it says you should risk 10% based on win:lose ratio is system, but you put a limit as 5 consecutive loss to have no more than 10% drawdown, than your risk is 2% and not 10% - for that I wrote a mobile app, it is at Android store ( lazy to publish the iPhone version, or I did? -idk...)

This best leverage calculation is Simple
I want to buy PATIENCE
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,450 Posts | Online Now
Quoting matheszabi
I am watching your posts, most are great one, this part probably I misunderstood, because I see no relationship between "profitable and consistent" and "ability to trade". for example: is somebody is using a low leverage, low risk it will be able to trade very long time, even he is loosing always
My answer was about this from Teofill00 : "From my demo experience i believe 1:100 with 0.03-0.05 per trade is profitable and consistent in the long term"

Just to say that the profitability of the trading has nothing to do with the leverage but with the trading itself (method/system).
MT4/MT5 EAs/Indicators/Alerts coder
  • Post #32
  • Quote
  • Edited 10:15am Feb 16, 2013 3:39am | Edited 10:15am
Quoting hayseed
hey r4..... yep, your absolutely 100% right...... no where did he mention 300......

some feel it's best to leave the leverage as is..... the reasoning there should be obvious, but if not, mudd explains below.....h

//---
A 20% a year on 300k is 60k which is substantial income, 20% a year on 1k is $200 which is peanuts.........both are vastly different scenarios & individuals holding respective accounts have vastly different goals & expectations......so it's unreasonable to think that what's good & sufficient for one is good & sufficient for another, without considering the context.....I'll elaborate in a bit.....

Did muddbuddha say he doubled his account in five weeks using 1:1 leverage???? I doubt that.........anyways, don't know much about muddbuddha but went through some of his posts & I'll just post some of his quotes, which I'll invoke later on to adduce my elaboration.....

Posted in 2006
Quoting MuddBuddha
Pip wise it has ranged from 600 a week sometimes up to over 800, like this week which has exceeded 850 in the first three days.
Quoting MuddBuddha
When I opened my first account with FXsol, I had $8900........

By five weeks into the new system, the account was $23,918.00......
Posted in 2011
Quoting MuddBuddha
My first large account was a $10k account with FX Solutions back in 2006. At that time I was trading a grid system......

I had gained 70% on account balance within three months........

At this point, I had convinced myself I knew all there was to this market and had mastered it. Then in September of 2006, the EUR/USD broke free from a very tight range it had been in for four months consecutively and blew north; ......

$17,450 went down to $9,800.......

It also made me yet another statistical casualty that find trading all too easy...
Ok, let's look at a simple model - trading 1k with 1:1 leverage, one would have to net 10,000 pips to double the account ($0.10 x 10,000 = $1,000). Now, let's think about it, about 95% of the people in this business can't even net a single pip.......& on average, most of those among "the 5%" net anywhere from a few hundred to a few thousand pips a year........so any newbie has odds stacked against them when 95% of entrants can't even devise a system that can net a single pip a year.......now, if one was able to devise a profitable system then it would only be fair to think that it would net about what profitable traders average per year.........now, think about it, in this scenario, even if one could devise a system that nets a few hundreds pips a year would be great to have but if one is trading 1k with 1:1 then it would take DECADES to reach 2k.........even if we bump it to a few thousand pips a year, it would still take many years to reach 2k, many more to reach 4k, many many more to 8k & so on.

Now, it's possible that someone may devise a system that nets 10s of thousands of pips a year, which would, theoretically, may make it worthwhile to trade 1k with 1:1 as they'd be able to turn it into something significant years down the line.......but it's unlikely that any such superduper system would continue working for decades until one earns substantial amount of money........it may work for a few months, may be a couple of years & when it eventually fails as the market-conditions change, it can backfire in just as extra-ordinary way as the extra-ordinary profits that it was generating earlier.......here, I'll cite muddbuddha posts quoted above, he has posted astonishing returns in 2006 but as he admits later on (with a brave heart), the system that produced those astonishing returns, backfired just as astonishingly after being successful for a little while........& let's say even if somebody was able to make some superduper strategy work for decades, they'd be the odd exception & aiming to match them would be a probabilistically futile endeavor......

Anybody that is looking at forex as a serious business-opportunity, they should consider whether they'd be able to generate justifiable amounts of returns in the LONG-RUN otherwise they'd just be trading as a fashion-statement or just entertainment or whatever...........now, one would have to think that the less pips one has to net, the easier it would be to create such system but the returns would be lower too........that's where leverage comes in.......1k with 1:1 = about 10,000 pips to double/destroy the account, 1k with 1:10 = 1,000 pips to double/destroy the account, 1k with 1:50 = 200 pips to double/destroy & so on

Now, there may be some who may mischaracterize this situation by saying why not use 1:10,000 leverage or whatever, well, because about a one pip move against you would wipe out the account.....so again, one has to take into account the trading strategy to find the optimum level......what the stop-losses are, what is the likely longest losing streak. what is the maximal drawdown-potential & so on

A lot of people say leverage kills many traders, well may be, but it's not leverage per se, it's the lack of foresight, it's the lack of a probabilistic game-plan &/or lack of discipline to follow it, leverage just hastens the process.......honestly though, if somebody is incapable of performing a task then it's better that they find out earlier than later, so that they can either improve themselves in that area or just move on with something else that they are good at......rather than wasting their time doing something that they aren't good at....

So again, being a successful trader is hard in itself that one needn't make it harder for themselves by having to reach unrealistic goals like netting 10s of thousands of pips a year........accordingly, trading forex with 1k with 1:1 leverage is like stacking the odds against oneself from making any real returns in the long-run...........it's better to just learn to trade with leverage on a demo, see if one can be consistently profitable for at least 6 months, year or however long one is willing to go at it, if successful then open a small live account & see how it goes, if not successful, just move on in life, do something that one is good at......not everyone is born to be a forex-trader just as not everyone is born to be a doctor, lawyer, engineer or whatever.
  • Post #33
  • Quote
  • Edited 9:19am Feb 16, 2013 5:17am | Edited 9:19am
Quoting r41225
they'd just be trading as a fashion-statement or just entertainment or whatever............
hey r4..... perhaps you have hit the nail on the head there......

my total yearly forex gains do not come close to being as much as my expenses in my etrade stock/options/futures account..... so quite possibly some might consider my forex trading as just a fashion-statement ....... that's quite ok..... after all, some of the commercial coders here on ff have called me far worse for attempting to code..... and that was quite ok to.....

i just compared my explorer to some others..... my leverage shows 0 : 1 on most trades..... theirs were much much higher.......

//----
family major medical problems are on my mind right now and will be for a while so let me quickly say,,,,,
my first post in this thread started with the words for me.... meaning, my thoughts are not for everyone...... and ended with....... grains of sand add up...... yall take care.....h

//----

edit, my error, meant to say expenses instead of week commissions..... expenses would include commissions, spread, and all such combined.... as example, currently there is a 340$ per contract spread on some ise ndo options, nzdusd...... oex 100 options can be as expsensive....
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to trade and code, keep both simple... no call to impress....h
Quoting hayseed
hey r4..... perhaps you have hit the nail on the head there......

my total yearly forex gains do not come close to being as much as my every week commissions in my etrade stock/options/futures account..... so quite possibly some might consider my forex trading as just a fashion-statement ....... that's quite ok..... after all, some of the commercial coders here on ff have called me far worse for attempting to code..... and that was quite ok to.....

i just compared my explorer to some others..... my leverage shows 0 : 1...
Just to be clear, the fashion-statement wasn't directed at you as such, in fact, my very first post in this thread specifically mentions you as an exception......

I know a trader who has turned a $500 account into being a multi-millionaire in the last 6 years, & he definitely has used high leverage, especially in his early days, & still uses higher leverage than most people at his account-sizes would, which has allowed his account to grow at astonishing rates & mind you, he hasn't had a single losing month for years; if he were to show his equity-graph going from $500 to whatever, it doesn't mean that everybody starting with $500 is going to achieve that using high leverage.......

Yes, you did start off by saying that your thoughts are for you but later, it did come off (to me) as if you were insisting 1:1 was the way to go for everyone.........personally, I don't think leverage is for everyone, even trading itself isn't for everyone but when a newbie starts off on his/her trading-path, it would be helpful for them to know the obstacles that lie ahead in their path......& the things they'll need to achieve to sufficiently succeed in their chosen style of trading......

Anyways, happy trading
hey rf..... yes i did notice..... thank you..........

edited my post above, meant to say 'expenses', not week commissions.....h
to trade and code, keep both simple... no call to impress....h
Quoting numbnuts
The most important question, is how much you want to risk on each trade. This depends on your reward/risk ratio - systems with a higher r/r win less often and need to risk less. When you know what percentage of your account you want to risk each time, adjust your position size every time you analyze a trade according to where your s/l is. When you know how many pips you are going to risk on that particular trade, and how much money you want to risk, calculate the position size so that number of pips equals the risk target. Example - with a $1000...
Hello Numbnuts,

So you are saying that as long as you have a reasonable money management strategy that goes in accordance with your balance leverage is nothing to worry about. Also does leverage affect the amount you trade? e.g. using 1:500 will allow you to trade 200k lots, whereas this wouldn't be possible on 1:100?

The reason I am asking is because, i dont see how an account will grow at a good pace, if you are not increasing the lot size and that depends on what leverage you use. I agree with what have stated. Its all down to your money management, and my money management is a little bit aggressive but reasonable at the same time to a point where I'm able to profit at a good pace and reduce my risk.

Also when a person over leverages, is that a result of someone have high leverage and trading extremely high lots relative to their capital, e,g, Someone with £1000 using 1:500 leverage and trading 400k lots?

Thanks
0% FEAR 100% GREED
If your win ratio was 60% on average. I would say the more trades you enter the quicker you accout will rise. I guess the question is if I did have $1000 what lots sizes should I use and how many trade should I enter a day. What is the biggest loosing streak that you've ever seen as a trader???.... If I traded for 6months and lost (11) trades in a row then I would have to say that I would adjust my trade amounts accordingly. with 20pip stoploss 60pip gains it would take 3 losses to break even not to mention spread cost. 11 in a row x 20 pips 220 pips risk per day with 1.00. you could even close out trades early like 40 pip or 25 pips if you didnt trust the market.....you tube is a great source for strategies. the higher the time frame the more predictable the out come and less of a fluctuation
I have $1000 deposited. Im trading .05 lots with a 10 pip SL. My leverage is 25:1.
Well everyone has their own idea, here's mine.

#1 Lets make it "simple"... *whatever* the market does, you need to be able to open new positions. If markets drop 99.99% and someone is there selling stuff for 0.01 that just cost 100 dollas, you want to be able to buy it. That's rule #1.

Rule #2 is that if you use leverage, when market drops to 0.01 it's extremely likely that a lot of leveraged people, including you, are on the wrong side.

Rule #3 never trade using a single leveraged account.

Rule #4 leverage may be completely unavailable and many brokers have frozen platforms when the bargains are in. They are frozen because their shty java code is busy processing the margin calls and of course the broker wants to buy low themselves from those margin calls, so better to freeze the platform so others can't. Secret "rule" is that after this, expect the market makers and brokers to come out with announcements how much money they made and how many new yachts they bought.

Bonus rule: get rich quick type traders will learn about the "why's" of these rules eventually so don't ask why. You'll learn ... if you don't obey.

Where things get complicated is if you want to utilize the available margin to maximum effect. You need to calculate what would your "worst case available margin" be. Idea being, if you wanted to reverse when in drawdown you should be able to (you should be able to re-reverse also incase prices bottom just when you reverse). So question is, how do you calculate your available margin in future when the broker may change it on a whim intraday?

3 brokers. Start trade at one, then if you need to reverse, reverse at 2nd broker. Then if you need to re-reverse again, do that at 3rd broker. (broker 1 long, broker 2 short if broker 1 goes to unexpected large drawdown, broker 3 long 2-3x the amount of first long. if still goes down, add to the short in broker 2 so that you cancel out losses at broker 3 - repeat this process until bottom is found)
Ive started trading .01 lots for every $1000 and this works for me it all depends on your sl and how much your prepared to risk I think if you start with $1000 its going to take a very long time before you make any real money i think its good to start with a small account when your learning to trade and then when you start to make a profit increase your deposit if your desperate to make money i think this is not good for trading best to have another source of income at least for the first five years but there always exceptions
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