Hi Experts. Please can someone help clarify. I know not to keep positions on forex trading opened for many days, i know i must use stop loss…but, lets say, hypothetically,
I took a trade if $1000 on eurusd as an example but as soon as i clicked buy, it went in the opposite direction. By end of day, it is sitting on - 500% loss.
Lets say i decided not to close. The next day, my investment of $1000 fell to $960 because of the overnight fees. The loss, if at same point as night before, is no longer 500% loss but 460% for example because the investment amount reduced.
Now, lets say i kept this trade for 25days, hypothetically, the rate stayed negative, hence my overnight fees would be 25 x $40 which is $1000, that means my original investment of $1000 is now $0.
My question, now that my original invest fell to 0, will the trade close?
Do i only lose $1000 in total from the time i opened trade to 25 days later when trade fell to 0?i
How does some people say they have trades opened for 2 to 3 months when the overnight fees would reduce the investment to 0 in 25 days?
Brokers require a minimum margin, an amount to be in the account befor you open a trade. For eg $250. So your trade will close when it gets there not at 0. If the market moves very fast and your broker doesnt offer negative protection then your balance my fall to -ve because it sold off too fast and then you’ll owe the broker money.
If the market moves slowly then you’ll only lose what you put in. The overnight charges come out of your balance everyday until you dont have enough to keep it open.
The broker i used is called iq options. They remove the overnight fee from my investment of $1000
Secondly, lets say my acc balance has $20 000.
Im asking, when the investment amount reduces to 0, what happens, does the trade close or does it go after my acc balance.
If you say acc balance, then what happens if a close the trade at 20 days, means my investment amount reduced from $1000 to $200, as $800 was the overnight fees for 20 days. If i close it, do i lose only $800 or much more?
What do you mean if your investment reduces to 0?!
Why are you using 2 terms ‘account balance’ and ‘investment’. You are trading with your whole account balance.
If your account goes to 0 you’re done mate. When you trade you use all your balance unless you use a stop loss. If it holds you’ll only lose what you used otherwise if the market moves fast you’ll lose more.
When i say investment amount, its the amount i used to buy a trade, lets say i spent $1000 from my main acc balance to buy a trade that was 1.0224. so i spent $1000. My acc main balance is $1 million so im not worried about that balance.
Im saying, when the trade is running for 20 days, the overnight fees would reduce the $1000 to $200, so 2 questions:
If i close the trade at $200, do i only lose $800…
When i took the trade at $1000, when it hit negative 95%, 20% of my investment amount being $200 was reduced from my $1million, when it hit 115%< another 20% was removed from acc balance, so, when the overnight fees reduce the investment amount of $1000 to $200, means my loss in % is no longer high, so what happens to all the $200 it removed from acc balance, if the loss is no longer 500% but after 20 days the % loss is now only 100%
Your numbers are all over the place. Your wording is all over the place.
If you have an account of 10k. You place a trade and you want to risk 1k. Then you cant just say I only want to risk 1k, you have to have a stop loss at 1k. When you say ‘buy a trade’ you mean you want to go long? I’ll assume you mean that. You cant buy a trade, the wording is wrong. Your £1000 is not gone when you put a trade on, you are risking 1000. It just slowly goes down from your overall balance until you close the trade.
If your trade is -800 your balance is £9200 and the trade is still open then you can close the trade and you will only lose 800.
Question 2 makes no sense to me. What’s with all these %s. Please re explain it.
Fully agree that my wording is all over as thats why i am a beginner in forex , hence being all over, but my qs are valid
You saying that if im -$800 then my acc balance is $9200, thats wrong, as i told you the $800 is due to the trade being 20 days, hence the $800 is overnight charges, the loss in 20 days could be much higher because every 10% after 95% it removes 20% from acc balance
So, when the overnight fees reduced the 1000 to 200, does the 20% recurring deeuctions after 95% get added back to acc balance seeing the new loss will be lower
Stop jumping from place to place. Youre assuming your position has lost money. Stop assuming, give me numbers. If your position stayed in the same position then the overnight charges of 800 would mean your account is 9200 and you can close it at 800 loss.
What 10% are you talking about?
What 95% are you talking about?
What 20% are you talking about?
Where did you get these numbers from?!