Hi my name is Cory, today I decided to place £10.00 into my account which I had spare, my account is in euro, so at the time when I made the deposit of £10.00, that would of been 14.xx euros plus the bonus of 4.xx euros (30% deposit bonus)
Because it was such a small sum of money I didn’t have much choice but to scalp the market. I am not too fond of scalping only because I don’t like to watch the market constantly or for too long; I more partial to swing trading, but for this account I decided to stick with my standard way of trading (with a few tweaks) but on the 1 min / 5 min time frames.
But a long story short; I was able to grow an account of 19.xx euros (including the bonus of 30% which I received) to an account of 230.xx euro’s. Now I don’t understand how so many people say there is no money to be made in scalping or day trading (even though I am not a scalper myself); I have not done the math but that’s a pretty nice percentage gain for one day’s trading.
For those of you who would like proof below is my statement, sorry but I don’t know how to post it as picture
Oh dear, the worst thing just happened to you. There are 2 reasons why you made that much money in proportion to the GBP 10 you deposited. First, the market has been very volatile. Catching the trend in time makes sure you will make a lot of pips. The second reason is leverage. You over-leveraged your trades and your strategy was able to make good trades.
Here are the problems you will now face and I hope you will have the courage to update us because many don’t. Leverage is addicting, especially when you make money out of it. If you will continue the same way with the leverage you will blow your account as soon as the market turns against you. If you decide to use less leverage, as soon as you make consecutive losses you will increase it to get your money back. This will end up blowing your account as well. You are now going to battle not only with the market but with yourself. I honestly don’t see you making it through because you made money when you over leveraged. The worse part of it is that if you blow up your account you will deposit more money to make thousands and end up losing again. My word of my advice to you, withdraw everything and deposit GBP 10 again. This will make sure the losses will be small and make sure you don’t go all-in in a single trade. You will thank me for this if you do what I suggest. If you choose not to, be brave enough to update us on your progress.
I’m not sure that making money could be the worst thing to happen to me, but thanks for the advice on withdrawal, not really sure what I’m going to do with it, will most probably withdraw but nearer to the end of the week
Hello Supermalt, I agree 100% with Pollar… In the end, it is YOUR journey, and sometimes there is no better cure to overleveraging than a blown account… We are not here to write ‘I told you so’ but we would love you to prove us wrong and keep making big winners
… I remain skeptical, however (from personal experience)…
It is the only cure, people always learn after they lose and not before. I hope supermalt you will avoid these losses and just take my word on this. You are not the first one I am telling this. I must have told this to many traders, none listened of course and all of them without an exception have stopped trading after taking big losses, all in the name of the leverage.
The amount of traders that were able to use high leverage and survive to tell the tale are very, very few traders. To stop yourself from going crazy, withdraw everything and deposit GBP 10 again after you get your money. It is also a good way to see how long it takes for the broker to give you back your profits.
I am puzzled when you say that I am over-leveraged on my trades, sure my account has a healthy leverage of 1:1000; but I am no where near trading at its max. So surely it shouldn’t matter how much leverage I have available, but how much leverage I am using at any time. And if I am able to manage my trades knowing that leverage is a double edge sword, moving stop losses to break even, closing trades out before my stop has been hit, reducing trade size when trading bad, increasing trade size when trading well etc. Then there should be no issue with how much leverage I am using just, only that I am using it properly
I thought it was a 10k to 100k silly me yeah its doable,but in forex its more about how consistent you can be in a span or 6 months to 1year, thats a good start, not so sure about the broker though but do keep us posted1
Why do you say max leverage means over leveraging? Do you know how dangerous it is using just 50:1? Also, why would you close the trade before it hits the stop? I really tried preventing you from figuring this on you own, sadly, like everyone else I have to say, it won’t help. I really tried helping but the profits you made are blinding you now. Over time you will realize how much agony I was trying to save you.
So if I understand, you mean 1,000 units (a microlot)? Try switching to a dealer that will allow you to trade smaller sizes. Oanda allows position sizes as small as a single currency unit.
Q - Why do you say max leverage means over leveraging?
A - I’m not saying max leverage means over leveraging, I’m saying that I don’t trade any where near my max leverage therefore I don’t understand why you are saying I’m over leveraged on my trades.
Q - Do you know how dangerous it is using just 50:1?
A - No I don’t, never had an account with such low leverage, but I do understand that leverage can be a double edge sword for people inexperienced in using it. with a leverage of 50:1 and a account size of under £1000 that would take a long long time to make any decent gains (swings and roundabouts).
Q - why would you close the trade before it hits the stop?
A-My philosophy is when a ship starts to sink, don’t wait, jump.
Statement - “I really tried preventing you from figuring this on you own, sadly, like everyone else I have to say, it won’t help” etc.
Reply- For starters you have no solid facts to come to that conclusion, I’m unsure if your just basing your assumptions about how I trade on your own past experiences; trading is subjective and each person has his or her own way of participating in the market, or their own “holy grail”. And each person has his or her own tolerance for risk, what may seem like a large position to you may be a regular one to another, it all depends on how you manage those positions once you are in them.
I am 100% behind you when you suggest to withdraw a partial amount of the profits, just sounds like you are making a few indirect assumptions as to whether I am going to blow my account after an incredible 1400%+ gain in one day. I am also aware to the psychological effect of good trading days and bad trading days; and how easy it can be to acquire that God fallacy when things are going well.
Thank you for your replies and I appreciate your opinion
I have had a look at Oanda and other borkers, but I am pretty comfortable with what lot sizes my broker offers. If I had a small account of say £20.00 and traded .01p per pip that, it would take 2000 pips to blow that account, so I think .01 is plenty low enough for me.
I just want to add that leverage does NOT lead to a blown account, the lack of risk management does. Trading 1:50 or 1:500 or 1:5000 will not cause you to zoom down to 0 in your account. Let’s say you have a small account of 10K and you risk 3% per trade. This would be 300. It does not matter what you leverage is, you will only lose 300.
Leverage does impact your trade in other areas and the negative effects could cause you to blow up your account based on how you react to the them, but by itself leverage with proper risk management does not lead to blown accounts. Traders just don’t know how to properly use leverage, hope for an event to occur, adjust risk management or flush it down the toilet altogether. There are always exceptions of course, but the assumption that high leverage will cause you to blow your account is just wrong (those who claim that should not feel bad as regulators credited over-leverage as the reason for the 2008 financial collapse and therefore failed to get it right…again; the lack of risk management was the issue).
I am going to give you an example of 50:1 leverage with $500. 500 x 50 is 25,000 or 0.25 lots, around $2.5 a pip. If you are using a stop of 20 pips for example it’s $50, which is 10% of your balance. When you get 5 consecutive losses (this is not ‘if’) that’s 50% of your account gone. If you are trading with small money and over-leverage the trade to make money that turns the trade into a gamble. If on the other hand you have $5,000 and you open a trade of 0.25 lots, a loss of $50 is only 1% of your account. See the difference? You wont be able to recover after you make losses if you use 50:1 with small money.
About the rest, I will let the market teach you those lessons as anything I will say will be regarded as theoretical. If you withdrew everything aside GBP 10 it was a very wise move.
yeah its doable,but in forex its more about how consistent you can be in a span or 6 months to 1year, thats a good start, not so sure about the broker though but do keep us posted1