Can you use unrealized profit from a Limit order to open more positions in an account?
- Thread starter Con1991
- Start date
So it's being done with the ,,help" of leverage ?
(If it's a long position)
Oh...
My initial response to OP was :
Illogical.
But this info showed up.
Demo, without warning, twists people into thinking that something is possible, while it shouldn't be, yet technically it is and
- only for the worse.
@Con1991 if you're beginner - avoid leverage like a plague.
No,he should try it out. He is in DEMO mode, so no harm done and maybe he will find out why always go to the limit is not a good idea.
It is illogical, and that is why not many people know it or even do it.
But when you for example trade a future contract with an overnight margin of $2500 dollar, you can open a new contract when ever your account grows by $2500 dollar. So, if you know what you are doing, you could build up positions with market money. The big problem is margin calls, if your positions goes against you. If your account drops below the margin requirments, your broker will liquidate your positions and you hold the bag for any losses that comes with it.
But when you for example trade a future contract with an overnight margin of $2500 dollar, you can open a new contract when ever your account grows by $2500 dollar. So, if you know what you are doing, you could build up positions with market money. The big problem is margin calls, if your positions goes against you. If your account drops below the margin requirments, your broker will liquidate your positions and you hold the bag for any losses that comes with it.
