[B]PART 3. DEPOSIT[/B]
You often ask whether it is advisable to put a STOP yourself, and if yes, how much. What is the Max Open Trades, how much money do we need to have on the account to start working with [B]ZuluTrade[/B], etc.? I will try to answer those questions, basing on my own experience.
Well, for the beginning, you need to have on your account a sum which is no less than the minimum deposit required for the account activation. When the account is activated, you need to have on it enough money to complete at least one full trade. Providing that, it can be assumed that you can work with [B]ZuluTrade[/B]. The cost of a trade varies with different providers. There is a way to calculate this value: learn how many [B]STOP[/B] pips the provider uses, multiply the number by the price of one pip and add the margin (find the pip price and the margin here).
Here’s an example. The provider puts, say, 180 [B]STOP[/B] pips at the maximum. And if you have a micro account, you will need 180 pips plus the margin amount on your account, to be able to open a trade with a lot of 0.01 for EUR/USD. 180 pips makes 0.1x180=$18.00 plus the trade opening margin of $2.80. So you will need $ 20.80 to complete the trade. This is applicable to the [B]STOP[/B] of 180 pips. If a provider uses more or less STOP pips, the sum required for a trade will vary as well.
Basing on how much money is needed for one complete trade, we can easily calculate how many open positions we may have at a time. Let’s say you got $150 on your account and you added a provider with the STOP of 180 pips. Our calculation shows You may use the [B]Max Open Trades[/B] not exceeding 7, as 150/20.80=7.20. So no [B]Margin Call[/B] will be applied to you.
[I][B]IMPORTANT. If the providers gives more than 180 STOP pips for any of the trades, the required sum will be bigger for the trade, too. So the Margin Call becomes possible in this case. That’s why you have to make sure that the STOP doesn’t exceed the previously planned values.[/B][/I]
With the providers that don’t use the [B]STOP[/B], it is all quite different. As the [B]STOP[/B] value is not given by the provider (or a too big value of, say, 500 pips is given), you will have to put it yourself. The easiest way is to find the [B]Worst Trade[/B] value and put it as the STOP. But there is a nuance in this case. The fact that a provider has a floating loss not exceeding 180 pips doesn’t mean that the provider won’t ever have a bigger value. For instance, one of the top providers, [B]100% winning trade[/B]: their recent trades show that the [B]Worst Trade[/B] did not exceed 227 pips, but right at the moment (of writing this post) the provider has open positions for trades with –250 pips. Keep that in mind!