I just started live , and i dont want to try this thing until im sure about it :X
Im trading with 3000$ since 1 week and everything is good …
The only thing i want to try live and i cant because it could be risky is to use the Mergin call as a stop loss , what i mean is ,
To use the max Units and have 60$ Margin left …
Which is 0.02% per trade …
Pros…
It will bring me the maximum profit (More units) , since i success with 7-8trades out of 10 …
Has any one tried it ? what would u say ? good or bad , and why …
To me one of the most important things is to live to trade another day. So I personally would not put all my eggs in one basket, especially if there was a 30% failure possibility.
Btw I don’t think you’re calculating the 2% per trade figure correctly. The point of that logic is that, in a WORST case scenario, your account equity would not reduce more than 2%. If you are at risk of a margin call, then you are trading more like 50% risk I think…
Well , its you again thanks for visiting this thread again ,
But using the MAX units available on account with 60$ left for margin = the same as 0.02 , so i cant lose more than 60$ trading max Units available
You need to think about it again
i trade ALOT ( max units you can get of your balance ) , but u cant lose more than 60$ because u have margin , if u lose 61 then ur trade will close , its like S/L
this way , i will have more $ per pip using max units
well, in theory if you able to set a margin call where your normal SL would happen, and take around the same loss, then i would prefer the margin call option, since there is no way to change things around, ie no last minute emotions to pull SL…margin call will close out your trade.
but i am pretty sure it is easier said than set up, or to do set up…
if you have 100$ account, and 100:1 leverage, you can open a max position of 1 mini lot (10k unit,1$/pip) around, but say a 10 pips SL wouldnt equal to a margin call at most broker.
while using smaller leverage would close this gap, you would rapidly lose the max position size as well, ie lowering the profit potential considerable vs having a SL and a large leverage, like 400:1 or so.
i think probably it is better to stay with SL, and work on your emotions to honour them once set up.
I think a margin call normally happens at 20% of your account, not .02% or 2%. At least that’s how my broker does it. And that is not responsible management in my opinion.
How are you doing (it sounds as though you’re doing alright)???
Oddly enough I thought about this very same thing before (at the beginning of my ‘trading career’ and then again the other day strangely enough). The advice that I was given in the ‘early days’ was that it would be a definite ‘no’ and I didn’t know enough back then to argue the point or understand the reasoning. NOW I would say THIS: I would NOT RECOMMEND it but there’s ‘strictly speaking’ nothing wrong with your ‘logic’. The main reason I would say is that it would depend largely on how or when your broker will close out the positions (and there’s another problem i.e. multiple positions or not but I’ll get to that later). At some brokers: the positions would be automatically closed by the system and in that case you may be ‘lucky’. But I do know of at least one ‘bucket shop’ broker that if they figured that’s what you were doing then believe me they’d hold those positions open for as long as possible even although your available margin had turned negative so in this instance you actually would have no control over exactly how much you would lose but you can be SURE it’d be a lot more than your 2%!!! Anyway: even if you TRIED this out you’d not be able to trade more than one instrument or have more than one trade open at a time the reason being is that if you tried this with let’s say three positions open the broker may or may not close all of them so you’d have a big problem if the broker closed out let’s say two of the positions and left the third one open i.e. the margin that was being used on the two positions that have now been closed would now be freed up thus giving the remaining open trade much further to run against you before you were margin called and again this would mean a greater loss than you anticipated and again you would have no control over this.
So ‘logically’: no reason that it couldn’t work. But it’s way too risky i.e. there’s just too many unknowns in my opinion. ALSO (and I only thought of this now while ‘finishing up’ here): in a very volatile market price could move against you too quickly and the broker may simply not be able to close out the positions quickly enough (you must remember that even although we’re talking about being margin called here when those positions are closed out that’s actually still a ‘trade’ as it were so the same ‘slippage’ is possible as with stop orders in a fast moving market).
So yeh: as I read my answer to you I’m actually thinking that ‘no’ was the correct response that was given to me and that I’m now giving to you!!! LOL!!!
Regards,
Dale.
Edit:
‘Mudder’ makes a good point too i.e. at some brokers you can be margin called at any point in time if your free margin percentage drops below a certain minimum. Deltastock’s minimum is 30%. Once that limit has been reached the client is contacted and made aware of ths situation and basically is given some time to rectify the situation (either close out some positions or deposit more funds) but if the positions continue to move against you then they could be closed at at any point in time if you remain below that certain minimum (but alright you would never move into a negative free margin percentage if that’s any consolation). My advice again: stay with the ‘tried and tested’ methods of risk / money management. Adhering to a good set of risk / money management rules is THE ‘key’ to being profitable in this business I assure you.
You’re mixing things up. If you go “max units” on a $3000 account you’re talking about $150,000 worth of position size, against which your whole account will have been post as margin. Most likely, your margin call would come at something like 50% down (depends on your broker, though, so confirm). That means you’d lose $1500 at margin call, not $60.
I got what you mean , lol , no dady nooo , SL is my key
Ye its risky , after posting the second post i relized that if i open 150,000k Trade , i would have minus 30 instantly because the spread … and 1 more or 2 more ticks im DEAD
its bad idea , i know now , i will stick to my strategy then , because its too bad and so stupid to leave my strategy and not improving it , because i make like 200-300 USDeach day , well its 2 days but its doing so well , i will keep going this way
and Dale , a special thanks to you , your always here for support and help…
I appreciate your time and effort
Well … LOL… not really. It’s not a game to me anymore. I’ve blown up too many accounts and don’t have much trading stake left. So it really is do-or-die for me.
thanks for visiting this thread again ,
but its doing so well , i will keep going this way