I recently read the forex course on this website and been paper trading way into the green and wanted to ask if someone with experience on this forum could check my math;– as I’m wondering If I’ll be able to create my good demo results with real money.
So the broker I’m thinking of choosing offers zero comission and a Spread of 0.3 pips. It also offers leverage of up to 200. I’d fund my account with roughly a 1000 Euro.
To train this scenario I chose Trading View and traded with no leverage, but used 10.000 units each trade and a comission fee of 0.30 (0.15 to open and 0.15 to close as there’s no other way to do this on tv). If my math is correct, the spread cost for 10.000 units with my broker should be 0.30 cents (dollar) when trading EUR/USD as I have done. I.e. if I were to open a trade and close it asap I’d have lost 0.30 cents.
To me this all sounds to good to be true. Kind of wondering if there’s a catch I’m missing. Because for now I’m getting super good results scalping. Even the small winnings stack up nicely, like 10 second trades and a carefully placed stop loss saves me from loosing.
Anyway. Maybe someone will wake me up from a dream.
Maybe. But misunderstandings are rife, and especially different brokers (among the ones who talk in terms of “units”) can use that term differently.
But first: welcome to the forum!
In a sense, that could end the conversation, right there. But that would come across as both rude and unhelpful, so we’ll doubtless try to do better.
The big important point (and it’s really a hugely important one, that eclipses everything else you’ve mentioned and asked about) is that a broker offering 1:200 leverage cannot, by definition, be properly regulated, for the very simple and vitally significant reason that proper regulators aren’t allowed, by law, to regulate brokers offering that level of leverage.
So that means the broker is either unregulated (in which case run a mile) or “regulated” by a non-proper regulator (in which case still run a mile) of the type you get on Caribbean/Pacific island nations where dodgy/corrupt “financial services” are part of the local industry, and there are plenty of “regulators” who will pretend to regulate forex brokers in exchange for a larger-than-normal annual fee, the understanding being that under no circumstances will those “regulators” ever rule against their customer-broker, in the event of a dispute.
And - surprise, surprise - those are the brokers whose customers have all the disputes.
So that kind of settles it, really. Or ought to.
This “10,000 units” you mention probably means 0.1 lots, I’m guessing? When you’re trading a dollar pair (like GBP/USD or EUR/USD or AUD/USD), where the USD is the quote currency, “1 lot” means $100,000. (This doesn’t apply to other pairs). So 10,000 units is probably a tenth of a lot, or 0.1 lots.
If the spread for that is $0.30, that’s a low and very acceptable spread, for a commission-free broker. Is that a fixed spread, or does it vary?
I think what you’ve missed is the “regulation” question.
This is cool … and presumably you can do that with a real, regulated broker?
Well, maybe …
The key point to appreciate, in that context, is that when you “trade forex” you’re not really trading, and no currencies change hands. So the party being “scalped” is actually your broker! (Are they going to like that? Are they going to let you do it long term? Will there be a “dispute” about it? Maybe you can start to see one of the reasons why regulation is so crucially important?).
These few posts/threads may interest you (at least I hope they will!). Just click on the words in green, in each case.
thanks a lot for your detailed answer and for welcoming me to the forum. I plan to spend some time here! And thank you for warning me. The Broker I referred to is Trade Nation. As I understand it for UK users it’s regulated in the UK (I read leverage should by law be like 30 there), but as I am based in the EU I fall under their Bahamas regulation. To be honest, a lever of 200 always seemed a bit high to me as I’m still a beginner… So what I’ll do is go check out some alternatives which are regulated in the EU/Germany. But that aside I have to say I testet the companies support thoroughly and have to say they have been very very nice and quick and helpful.
Yes, 10.000 units, one mini lot, 0.1 lots. And the spread is fixed.
So if any broker had more customers winning instead of loosing money, they wouldn’t be able to survive? So this is gambling after all?!
Cheers,
Maschu
PS:
Will check out the links now!
Also, If you can recommend a broker, that’s regulated in the EU,
That’s a different company. “Regulated in the Bahamas” means “unregulated”. Run!
Very good!
There’s no “after all” about it. It’s betting, pure and simple.
Cyprus, Malta and Bulgaria are not quite so good for regulation. Anything else in the EU is fine. (Also UK and Switzerland regulation are very good).
A good rule of thumb is to have $250 (or in your case 250 Euros?) in your account for every 0.01 lots you’re going to trade in terms of position-size. So with a 1,000 Euro account, you “would perhaps want” to trade a maximum 0.04 lots.
Some people would say $300, not $250, in which case maybe 0.03 lots not 0.04 lots. Opinions vary.
If the “10,000 units” you mentioned equates to 0.1 lots, you “would perhaps want” 2,500 to 3,000, for that.
But scalping and spot forex do tend not to go together, you know? It works on demo (so the “broker” can attract customers) but often not with real money.
The post below and the links inside it are among the many that explain why. Have a good read! -
Different people mean (sometimes very!) different things by “scalping”. It’s possible, if you’re using the term very loosely, that even what you consider “scalping” might be ok with some CFD brokers. But not real “scalping”.
What’s your trade-duration and average profit (in pips) for “scalping”?
Their spreads are not the best, true. They’re honest, though (that’s far from universal!).
Alright. I’m defenitely learning a lot here, thanks guys! My definition of scalping was: short trades up and down. Maybe 10 seconds to 30 minutes is what I have been doing. If one dollar is a pip, then everything from 0.5 to 10 pips.
Hey guys, just wanted to share a little story from my trading journey — maybe it’ll help someone out there not repeat my mistakes.
So, a while ago, I got super hyped after doing some paper trading on TradingView. Everything was green. Win after win. I felt like I had cracked the code for forex scalping. Quick 10-second trades, tight stop loss, small wins stacking up like magic. Life was good.
Then I started looking at brokers. Found one offering 1:200 leverage, 0.3 pip fixed spread, zero commission. It sounded like a dream, right? I was ready to fund my account with 1000 Euros and conquer the markets.
But then I stumbled into a trading forum… and got a reality check.
Turns out — brokers offering crazy leverage like that are usually not properly regulated. Mine was based in the Bahamas (red flag). The pros in the forum basically told me: “If you’re winning too much scalping, the broker is the counterparty. And if they don’t like how you’re trading? Good luck getting your profits.”
That kinda hit me.
Long story short: I started looking for EU-regulated brokers instead (Germany in my case). The spreads are a bit higher, true. But at least it feels real and safe.
Lesson learned , If it sounds too good to be true… it probably is.
Here at Babypips, some (perhaps many) people do call that “scalping”, these days. (It’s not what any longstanding, experienced trader calls scalping, or any textbooks or websites other than Youtube, really!).
My reservations above about “scalping” will apply only to the few-second, couple-of-pips-or-less trades, probably. The rest you may get away with, without problems, at a well-regulated brokerage.
omg bestie congrats ur math checks out perfectly, yes ur spread cost would be around 30 cents on 10k units eur/usd at 0.3 pips—that’s legit. ur demo scalping results sound amazing and realistic, but keep in mind real market execution might not be as perfect as demo (slippage happens). no scary catch tho just stay sharp and realistic when going live—slay carefully with tight stop losses and ur good demo vibe can totally translate irl. keep thriving!
Hey maschu, thanks for sharing your journey. I’ve been in a similar place, where a demo strategy feels like a golden ticket and you start wondering, Is this it? Did I crack it?
But real trading isn’t just the same game with money added. When I first went live,it shocked me how much my emotions influenced my decision-making.With spreads, slippage, execution; sticking to the plan suddenly gets harder. The true test of a strategy is how well you can execute it consistently, under pressure
Trade Nation is TD365 - They hold clients funds in an escrow account at Barclays Bank London.
This broker is used, and recomended by Tom Hougaard. Excellent ‘tight fixed spreads’ excellent customer service. 200 leverage, which is useful for adding to winning trades.
I also use IG, great company but every one point on indices needs £1000 in account, so you are safe based on a 20pt SL to go in full clip. However, no matter how far in profit you are you can’t add to your original stake.
Tom Hougaard is one of the most profitable high-stake traders in the world and he adds to winning trades like crazy, this would be impossible with IG or any broker with low leverage regulations.
What about Seychelles? Do companies registered there fall into the ‘unregulated’ category? I’m asking because I’m currently looking for a CFD broker, and the three I’m considering are IC Markets, IG, and XTB. I’m more inclined toward IC Markets
IC Markets Global is the trading name of Raw Trading Ltd, which is regulated by the Seychelles Financial Services Authority (FSA) with Securities Dealer’s license number SD018.
I’d like to know out of those three brokers which one if any can be considered more trustworthy?
They say that client funds are segregated and held at Barclays in London, but they don’t actually offer any evidence of that, and they’re offshore and unregulated, in other words there’s no regulator to enforce or inspect that, so there’s no way of knowing whether it’s true.
Very few people would send money to an unregulated, offshore bank in a Caribbean or Pacific island nation, because they know that financial institutions which have chosen to avoid proper regulation are so often “up to no good” and are interested in protecting only themselves, rather than their customers.
But sadly, when they’re opening an account with a forex broker rather than a bank, this common sense and entirely appropriate reaction seems to desert huge numbers of people, and that’s why every trading forum has so many threads full of people sobbing about their lost thousands.
Use a properly regulated broker!Getting this one simple little thing right is the quick and easy way to avoid problems later.
