is dependent on what kind of broker you have.
This explains it quite well imo
https://www.cliqforex.com/general-fo...1-usd-cad.html
is dependent on what kind of broker you have.
This explains it quite well imo
https://www.cliqforex.com/general-fo...1-usd-cad.html
Easy answer is cash management.
Build your account up gradually. When you start seeing big cash on your account dont think you can start increasing lotsize to increase profits prematurely. Its better to reduce your risk as equity goes up until you get to a place where you cant lose. Then boost your lotsize.
Create a trading program and stay with it. Any strategy should have all this worked out already.
I see that Forex shouldn't be treated like a company but I disagree.
Treat it like a business and you will have more chance of succeeding.
Create a robust plan and stay with it. Dont let greed let stupidity from the door.
Thank you for the advice
I am just thinking that it is hard to have a strategy if you can't accurately calculate your risk. And if it is possible that stop loss order aren't implemented then it casts a doubt on the validity of the entire thing.
I am really considering trading currency futures today. Have to find out more about it.
You cannot precisely calculate your risk whatsoever.
The best that you can do is prepare yourself for the worst case situation.
Black thursday is your NEW benchmark so prepare yourself for that X2 and you should be relatively safe.
But when you reach that point keep reducing your risk and there'll come a stage where ridding will eventually become impossible.
Here is a simple equation:
0.01 lot X 1000 pips = $100
0.01 lot X 10000 pips = $1000
So for each $1000 dollars of equity if you exchange with a 0.01 lot size you account can suffer a transfer of up to 10,000 pips before being wiped out.
Some might say these amounts dont look attractive and also its a waste of time trading for all those yields.
If thats true trading is not for you because this is actually the reality.
There is absolutely not any need to loose an account, accounts are dropped through failing to grasp the very simple fact ive outlined above.
That is not really the problem though. The point is that current events have proven some us who are newer to Forex which it is likely to do everything in our ability to manage risk, and still end up with not only our trading capital wiped out (no matter stop losses, which only function to manage risk if they get stuffed ), but could wind up owing MORE than is in our trading account. In theory, it would be possible to conduct up infinite losses. . .and who is willing to risk this?
My take on this is it is reasonable to trade only if (1) the trader employs a broker who offers guaranteed stop losses (for additional disperse, such as IG), (2) the trader employs a broker who is legally bound not to pursue negative balances (that they have'forgiven' a negative balance in the past does not mean they'll do it again in the future), or (3) operates in another method to avoid personal liability for negative balances, such as trading as a small company within the UK (I would be interested in hearing from anybody in the united kingdom who transactions this manner ).
As someone who8217;s only recently beginning to get into Currency Market I've been scouring the internet to get a broker that provides negative balance protection, however if any brokers like FXCM are to proceed by then once the business runs into trouble they will come across some obscure clause in the contract in order to chase you for the adverse balance. Sure you could go to get a broker such as Oanda that forgave adverse accounts because of this specific occasion but there#8217;s nothing from the contract claiming they can do this for a similar occasion in the future if it be a freak event or just because of losses you've made on multiple trades. As an alternative, you could look for brokers offering guaranteed stops. Nonetheless, this is only suitable for those not earning many trades as it comes with an additional price. This leads me to say that if you want some sort of reassurance that you won't get wiped out within a matter of minutes do not utilize leverage or keep it minimal. Hedge funds typically use 4-8:1. If you do not have the capital to trade then do not trade. In case a 14% change is enough to wipe out your funding then your leverage is too high. It all comes down to risk management. The leverage ratios supplied by the majority of retail brokerages is just too high.
Is it not?
Ok. So you would rather set the safety of your money in someone else's hands by over leveraging a trade and relying upon a stop loss?
Good luck!
There is one simple and effective way to avoid being wiped out in events such as the snb of few weeks ago.
How is:
Don't exchange restricted currencies!
If regular you play with fire, you're going to have burn.
Trade only free-floating markets, you'd be pretty safe.