You can create an FXCM demo with a custom balance using our MT4 platform. The login details for the demo can then be used for either MT4 or Trading Station.
Another trick to use is to simply watch the Usable Margin on the Accounts window. If that value falls to zero, then you would get a margin call on your trading account.
If you’re on demo with a 50k balance but only intend to fund your account with $500, then you can still use the 50k demo to practice. Just don’t let your Usable Margin on this demo fall to $49,500 because such a drop would result in a margin call for a $500 account.
Thank you, Jason Rogers, helpful as ever… I am glad you clarified this… I do not use MetaTrader, so I would not have known that… Everyone goes on about it: why is it so popular? I really like Trading Station, so I am just curious as to how it would be different, or what possibly could be better!
Naughtypip, I may be able to answer that, as I am trading from a £500 account: I use a leverage of 2:1, approximately, with 1k (£1,000) lots… You could still use 1k lots with a 50,000 account, so that it would not ‘feel’ different when transitioning to the smaller (live) account… Does this make sense?
Do you think using mini lots could be a bad idea when you’re account size in only 500 pounds? What would you do in a black swan type of situation when your stop is gapped over?
Some wise words. I hear a lot of talk about more experienced traders using less leverage, and while I acknowledge that higher leverage is a double edged sword I thought the more experienced/successful traders would be looking to use higher leverage to capitalize on their good trading methods. Is it not true that capital can be protected equally with firm stop loss placement regardless of the account leverage? Or am I missing something here?
yep I agree with the point of not moving your stops, Im a firm believer in that if I am wrong Im wrong, thats the end of that.
But I am more curious as to why the more experienced traders use less margin, my appologies if you covered it already but I really feel like Im missing the point.
An identical scenario can be had by changing position sizes while keeping less capital tied up in margin requirements. Are there any added benefits to trading with less margin? psychological perhaps?
I agree with PipMeHappy that for a $500 starting balance it’s probably best to limit the size of each trade on your account to 1k, so your risking about 10 cents per pip.
In addition to limiting your individual trade size to 1k, you also want to limit your total exposure in the market by monitoring the combined size of all your open positions. For example, if you’re short 1k of USD/JPY, and long 1k each of both USD/RUB and USD/CNH, then your total exposure is 3k or $3000. Your effective leverage in this case would be 6:1 since $3000 is 6 times greater than your account equity of $500.
As a general rule of thumb, try not to exceed 10:1 effective leverage on your account. That means if you have $500 in your account, you don’t want to control more than $5000 total in open positions. That equates to 5k or five trades with each trade being 1k in size.
MT4 is offered by most forex brokers, and for some firms that don’t have their own software development teams, it might be the only platform they offer. That means many traders placed their first trades in the forex market on the MT4 platform. Even when these traders change brokers, they’re inclined to stick with a platform they already know if their new broker offers MT4, which is very likely.
Due to MT4’s popularity there are many custom indicators and automated strategies (Expert Advisors) that have been developed for this platform. Most can be used at any broker that supports MT4, so an entire community has developed of MT4 programmers and traders who use their programs.
Like you though, I use Trading Station. My strategies don’t require any of the customer indicators or EA’s that were developed for MT4, and I prefer the charts on Trading Station. In the end, it comes down to what you’re most comfortable with, which is why FXCM offers clients multiple platform options.
Thanks Jason, very informative. That’s the info I was after. So for example by demo account balance is about 60k while holding 2 open positions totalling 400k, giving me an effective leverage of about 7:1 even though the account is leveraged at 200:1. Am I right in saying this?
I have briefly used MT4 but originally started on fxcm trading station which is where I have opened my live account. I do like trading station but did have an instance where a lot of my personal chart lines disappeared, but other than that I’m happy with it and the mobile app is nice for keeping track, though it would be excellent if it was able to show all the charting that has been done via pc.
All the info in this thread so far is greatly appreciated!
You set your monthly goal to 10 - 15% and your monthly máx drawdown? So every time you reach it, stop trading and make assessment of your tading strategy. How may trades per month?
You set your monthly goal to 10 - 15% and your monthly máx drawdown? So every time you reach it, stop trading and make assessment of your tading strategy. How may trades per month?
Hello quincyb45, yes, you understood right…The 200:1 leverage offered by FXCM is not, as I once thought, fixed, in that the lot size effectively is how you control the amount of leverage chosen… So, in your case, by choosing to trade a total of 400k on a 60k account, you are right in saying that the leverage is (400 / 60 =) 6.6(66666):1, or, if you wish, rounded up to 7:1.
PS - I agree with you that it would be nice to have the 'phone FXCM (mobile) trading station talking to the desktop trading station, so that all the lines we drew on the desktop trading station charts would also display on the mobile version… Something for the FXCM developers!
Yes I would like to maintain at least 10% growth on average, drawdown ideally would be less than 5% but I suppose I will get a realistic figure as time progresses now that I have a strategy to stick to.
Trade frequency will likely be 0-4 trades placed per month, could be a little more though with my current entry criteria I don’t see the market giving me many more opportunities than that.
If I happen to fail multiple entries in any given month it will definitely trigger some investigation. Good advice on taking a break once drawdown target has been breached.
Happy to provide some charts to give examples of the entries I look for if anyone would like a look.
Excellent, now I have my head around it. Trading micro lots gives the required flexibility which is what threw me off when talking effective leverage. Though in saying that, given that my strategy includes scaling in wherever possible/sensible I would have no problem utilizing much more leverage provided my stops were in correct places and I had sufficient capital to cover margin and open positions.
As for trading station mobile, sounds like a good weekend job for Jason I reckon
While your account offers you a maximum leverage of up to 200:1, your effective leverage in this example is about 7:1 or as PipMeHappy mentioned more precisely 6.67:1. The analogy I often use is that the maximum leverage available to you is like the top speed your car can go, while your effective leverage is like the speed that you’re actually driving.
Information regarding your chart lines is cached on your computer. Periodically this cache can get cleared out to make room for new data. If you save your chart layouts and templates, then you don’t have to worry about losing your chart lines.
Go to File > Layout > Save Layout to save several chart windows together. Go to Templates > Save Template to save your lines on an individual chart window.
Not me :28: God rested on the seventh day, and so do I! However, I will share your suggestion with our software developers.
Since losing my chart work once I make a regular effort to keep saving my layout a few times per session and have not had a problem since.
Update: Live account has been funded and now waiting for my first entry to appear in the market. Most likely will be long on either GBPUSD or EURUSD, though there are some other pairs that are shaping up to present an entry matching my criteria in the not too distant future.
Thanks to all who contributed their opinions and info!
