If you entered a position worth 50k (0.5 lot FX), on a 100k account... You don't need SL to make sure your max loss is 50k. Underlying goes to zero, you lost 50k.
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Stop loss calculations help
- Thread starter umarfxtrader
- Start date
If you entered a position worth 50k (0.5 lot FX), on a 100k account... You don't need SL to make sure your max loss is 50k. Underlying goes to zero, you lost 50k.
‘Get margin-called’, that’s easier said than done, don’t you think, what do you suggest could be done to avoid it?What's your broker's margin-call policy? If your broker's margin-call policy kicks in before you lose 50% of the account, just let yourself get margin-called.
See margin requirements vary depending on the brokerage you select, your account type, the trade type, and what securities are being traded. It’s really important that you understand these aspects before trading.‘Get margin-called’, that’s easier said than done, don’t you think, what do you suggest could be done to avoid it?
I'm learning and would like to know the answer of this hypothetical scenario.
Put all the know information in an Excel and let Excel find it out. Very easy.
I have a model for trading the ES. I put all available information in and Excel tells me exactly what to do. I can run all kind of hypothetical situations in seconds and compare them.
What data items are required for these analyses?Put all the know information in an Excel and let Excel find it out. Very easy.
I have a model for trading the ES. I put all available information in and Excel tells me exactly what to do. I can run all kind of hypothetical situations in seconds and compare them.
What data items are required for these analyses?
- Starting date
- Symbol of the commodity
- Tick value (tabel with values for every symbol that is followed)
- Account size
- Slippage in ticks
- Commission (tabel with values for every symbol that is followed)
- Max position size in contracts (tabel with values for every symbol that is followed)
- Margin (tabel with values for every symbol that is followed)
- Stop level in ticks (tabel with values for every symbol that is followed)
- Withdrawals in $
- Max open profit
- Max open loss
- Compounding or not, and till what size
- number of winning trades
- number of losing trades
- average profit per winning trade
- average loss per losing trade
- total losses in% against total profits
- drawdowns
- number of stopped out trades
- Impact of withdrawals on the performance while compounding
If I enter a symbol, the corresponding specific values/variables are loaded.
For the red marked items, I have lookup tables with the specific numbers for that symbol because there are more values possible for these items, depending on other variables.
I can search for the optimal values for each variable.
That’s the difference between amateur and professional traders. The latter minimize their losses and liquidate the losing positions to avoid margin calls. The former whereas deposit more funds to maintain a losing position.See margin requirements vary depending on the brokerage you select, your account type, the trade type, and what securities are being traded. It’s really important that you understand these aspects before trading.
That’s an important point you mentioned here. The margin required by each trader basically depends on the trade that one wants to enter, it’s size, price, and finally the leverage that a trader wants to avail. I’ve actually been following a formula with turnkey forex ever since I’m trading.That’s the difference between amateur and professional traders. The latter minimize their losses and liquidate the losing positions to avoid margin calls. The former whereas deposit more funds to maintain a losing position.
It goes Margin = current price x trading volume / leverage. Helped me a lot to avoid margin calls so far.
Gonna stick by it even for my larger positions on IB.
I never can have a margin call for the simple reasons that:
Example: Trade ES intraday with $500 margin is crazy. If you use $2,500 margin, you have plenty of margin before you get to the broker's margin of $500. So normally you can never get a margin call.
- I use a bigger margin than what brokers offer
- I use stops that are way before the margin call point
Example: Trade ES intraday with $500 margin is crazy. If you use $2,500 margin, you have plenty of margin before you get to the broker's margin of $500. So normally you can never get a margin call.