I’ve been reading about brokers and their position caps, which got me wondering. What is the largest amount of lots one retail trader can hold open, or can open with one click?
And InteractiveBroker has, atleest for some pairs, a 5 million (50 lot) limit per trade.
And these are ECN brokers.
Forex is a very volatile market, and because of that it surprises me to see such, rather small limits set, by respectable brokers.
Does this mean that traders with large accaunts should open dozens of little, in dukascopy case, 20 lot positions to cover a 1000 lots that they want on a single pair? (why not, if they can afford). If banks trade a lot larget positions, why are we limited to 20 lot incriments?
And those traders that claim they trade with more than 200 lots here on forums, is that by opening many smaller trades?
I’d like to hear your thoughts and experience.
correct me if I’m wrong
The main issue in the Forex will be the extent to which the statement is adjusted in light of the recent government shut down and debt ceiling negotiations.
My reason for having multiple accounts is not with how much trading risk you can get on its the credit risk of having all your cash in the margin account of a single dealer. I worked with someone who had a 150k in a poker account that went bust in the US and yep it was all gone.
I don’t agree, I think that if you look at forex within a proximity of a live stock market where nothing is within bounds of a market share index, we may or may NOT find a suitable substitute to cover the loss we inquired within the last decade.
However, I agree that the government shutdown made some changes when it comes to liquidity and downright impact on the daily global average transferred, but in the end, government shutdown isn’t the only thing that can cause that, isn’t it!
The quantity of Lots you can open in a single trade (by this I mean a price with no requote or partial fills) should have nothing to with the broker, but rather the liquidity providers. It’s a simple model of supply and demand, what is available to buy is available to buy, and what is available to sell is available to sell. This is a basic market function.
So if a broker says they them self have a limit to the quantity of lots available then this is wrong, as they are NOT the market, unless the are a market maker.
Typically, and as an example, during liquid times such as LO and NYO I have a look at GBP/USD Level 2 data which shows the number of lots available to buy or sell at each price level through my own broker. Seeing 100 lots available at each one tenth of a pip move is common.
I suppose broker will immediately correct your deposit to average value. But from theory angle there should be some limit. I think if you have less than one million$ (which is in a frame of accepted deposits) you can trade with broker. But if more you are able to enter market without broker with enough deposit.
