Hey

Beginner Questions
1

Hi Guys,

New around here and thought i’d say g’day. I’m a sports trader but have always been interested in Forex so am currently going through the forex school finding out what its all about and how to do it.

But I do have a forex related question related to the bank roll and leverage and I hope I haven’t missed it in the school but anyway I will ask away. Say for example my bank is $200 I open a trade and the market goes against me, stop loss doesn’t work etc is the maximum I can loose $200 will my broker stop me out once my account is overdrawn for example? I guess that’s my major concern I don’t want my broker to ring me up one day and say hey wheres our $10000. I am fine with managed risk but I don’t want to put my family in a bad situation. I guess with my previous trading experience that was one thing I would always know was what my maximum liability was at worst case.

Cheers for the help look forward to learning from this website and forum.

Tave
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2

There are extremely few instances where you could end up owing more than what’s in your balance, but by far and large those are rare and that if you have 200 bucks in the account, that’s pretty much what you have at risk.

3

Thanks for the reply Mastergunner clears that up in my mind then :slight_smile:

4

If the Profits we target at are low then the loss will also be low.

Given the starting size of $200 trading account i will advise a 0.5$ pip to start with and weekly gains of around 50$.

This strategy will give you 100% returns on a monthly basis :slight_smile:

5

Brokers usually require you have a margin requirement. If your losses exceed the amount that they make you provide, they will remove you from all positions, so its impossible for you to owe more then you have.

6

Thanks guys, the Aussie brokers I’ve looked at have min starting banks of around $200 so when I actually get to that stage I will probably start with that amount.

Yeah that was my main concern knowing the unlimited nature of these markets and being a forex noob you could get yourself into some trouble I suspect.

100% return would be very nice. I will see how I go developing a good strat who knows hehe.

7

To answer your query, no. Once the margin is exceeded and your account balance reads “Zero”, your positions will be closed automatically. And yes, it does protect the retail investor from losing more than he had intended…

8

Actually this simple means that the trader has not used the Rules of the Money management and this is why he will get the orders stop out as he does not have the required funds to keep the trades floating.