Hello, I just started trading with the demo account today and either I’m the luckiest trader known to man or it’s rigged? I placed a bunch of trades throughout the day and have somehow made like £3,300 profit, then once I pay the commission I’m left with about £2,272… Not bad for 12 hours :eek: I only had 1 loss out of 10 trades… the other trades were all just test trades for 1 amount.
Surely this can’t be legit? I know the money is not real but the markets are, the data is so if this was real money then this seems ridiculously easy, or was I just very lucky?
Also I wanted to ask someone who uses FXCM, are these commission rates normal? I mean in some of the trades they’re charging me like 20% - 40% of my profits… I looked on their site and saw $0.04 per 1K but in some of the trades they seem to be charging me loads. I admit I don’t really understand the pip system.
I’m literally just messing around trying to learn how the system works and it’s all on the demo account anyway so no real money lost or gained.
Here is a screenshot of my trades, this can’t be normal…
[QUOTE=“Hyper;740801”]Hello, I just started trading with the demo account today and either I’m the luckiest trader known to man or it’s rigged? I placed a bunch of trades throughout the day and have somehow made like £3,300 profit, then once I pay the commission I’m left with about £2,272… Not bad for 12 hours :eek: I only had 1 loss out of 10 trades… the other trades were all just test trades for 1 amount. Surely this can’t be legit? I know the money is not real but the markets are, the data is so if this was real money then this seems ridiculously easy, or was I just very lucky? Also I wanted to ask someone who uses FXCM, are these commission rates normal? I mean in some of the trades they’re charging me like 20% - 40% of my profits… I looked on their site and saw $0.04 per 1K but in some of the trades they seem to be charging me loads. I admit I don’t really understand the pip system. I’m literally just messing around trying to learn how the system works and it’s all on the demo account anyway so no real money lost or gained. Here is a screenshot of my trades, this can’t be normal… <img src=“301 Moved Permanently”/>[/QUOTE]
Do what ever you did again. And again and again. Write it down and don’t skip a beat. You’ll be done soon.
I don’t know what I did though lol. I just thought “oh this looks like it will rise or drop” and so placed my trade accordingly. If I get these kind of results trading I’ll never be done trading
There you can see I gained 3.3pips. I just want to point out that I’m not trying to brag or anything stupid I just want to know if I’m over looking something ridiculous… Please someone reply…
Maybe I am wrong, but it seems that you are trading huge sizes when you are making around 200-300 USD per pip? It is not difficult to make a few pips per trade since nearly every smallish bar will cover the close of the previous bar, However two things:
as you noticed the commissions are also huge on such position sizes with small pip moves
Markets can move dramatically in a matter of seconds. If you were trading your own money on this scale then you would be risking losing literally 10’s of thousands in an instance.
But the thing I don’t get is the leverage system… So I deposit £1,000 and they give me 100:1 on my money so I get £100,000 to play with…
If I make a trade and lose £1,000 then I’ve lost 100% of my money right? It’s not possible to lose 2% or 3% because that leverage isn’t actually your money so you can’t physically lose more than your initial amount?
Your 1000 is there to cover the margin requirements for the lots opened and to cover the [U][I]difference [/I][/U]in value between your buying price and your selling price of the notional 100,000. If you make a profit then no problem. If you make a loss then it is deducted from your equity. If the loss approaches the balance remaining on your account, and the lot is still open, then the broker will automatically close your position when the margin is insufficient (assuming you dont transfer more funds there). It is possible that a move is so large and fast that the loss is greater than your 1000 and the broker will normally expect you to cover the extra.
So does this mean that let’s say I have £1000 of my own money and a leverage of 100:1 so I place a trade for £100,000.
If that trade drops 5% (for example) and I close out the trade, the broker will charge my bank £4000 because that is how much I need to give back to the broker to make up the original £100,000.
Or can you physically not lose more than your initial deposit. You see I’m using the demo version so I automatically got given £50,000 of credit so I’m not sure how it works in the live system. In the live system if I deposit £1,000 will I get £100,000 in my account? Secondly is that £100,000 actually losable or are there measures in place to stop you losing the brokers leverage?
What you are experiencing is called beginners luck. You have no strategy, so you are trading purely based on ‘gut feeling’. You are trading like a casino: oh i think this number is good, and place a bet accordingly.
Most likely as soon as you start trading live you will lose a lot, both because your luck runs out, and you will experience anxiety and fear.
Try to do the following (in exact that order):
Grab a pencil and piece of paper
Write down what percentage of your account you are willing to lose (risk) on each trade (<2% adviced)
Write down what percentage of your account you are willing to lose (risk) before you will feel fear and start withdrawling what you have left.
Write down what you think you saw on the charts the moment you took those trades
Write down how that view would translate in rules (if a,b,c happens it is a valid signal to place a trade, otherwise ignore the setup)
Try and trade according to your own rules for a few weeks, and record both your thoughts, feelings and results before, during and after you place the trades.
Thanks Rudy. Can you please explain the leverage system though because I can’t seem to get a straight answer wherever I look. If I deposit £1000 and my broker gives me £100,000 this is a 100:1 leverage correct?
So no matter what happens, the most I can lose is 1% (My £1000 initial deposit) after that, I am eating into the brokers money which is not good… So, does FXCM phyiscally prevent you from dipping into the brokers money? This is really important to me I need to know…
I’m fine losing my own money, if I lose £1000 on 1 trade then so be it, I learned a lesson… but if I lose 5% on a trade then this is NOT OK! Because now I owe the broker an additional £4,000 which would be a nightmare.
Manxx is correct. The reason for the large swings in your equity is because of the large size of your trades. Your screenshot shows that you were trading 3000K EUR/GBP (that’s 3 million Euros). Every time the price goes up or down by 1 pip (that’s 1/100th of a cent) you are making or losing £300. In that context, a profit of £1200 is not much at all.
It’s only 4 pips and hardly justifies the risk you took in opening the trade when you consider that with a typical EUR/GBP spread of 0.7 pips (that equates to a spread cost of £210 on 3000K) and a round turn commission of £240, you were already down £550 (about 1.8 pips) the moment you opened the trade.
That’s also why you found the commissions to be high. They weren’t high at all but seemed that way to you, because you weren’t considering them in relative terms. On a 3 million Euro transaction a commission of £240 is not much for EUR/GBP.
You can ‘eat’ in the brokers money, thats why most brokers advertise with: losses can exceed deposits.
Brokers use margin calls to avoid this. So the position gets closed out before the account margin (deposited 1000) is used. This way the broker is safe, and you are ‘broke’ :60:
Your risk should be less than 2% per trade, and what I guess from your knowledge asking about this, less than 0.5%.
Don’t go betting your hard earned money in trading, it is a business not a hoby. Write down your trading rules. phisically write it down!
Do not spend to much of your time on demo trading and developing trading system because once you’ll move to a live trading the system will not work. Pretty simple; there is no any trading psychology in play. Once you start trading with your own money lot of emotions will show up and it wont be the same as with demo trading.
