I haven’t posted in a while as I’ve been trying to figure things out on my own, but now it comes time to pick a real broker. This website made me ask, in fact it even said “you haven’t asked a question in ages! try asking in the forums!” sooooo. I’ve read all the reviews I can, and it seems that there are just as much negative comments (if not much more!) as there are positive ones for any given broker. (Especially FXDD, which I was going to use before I read the reviews)
I like oanda, my demo account is with them, but they don’t allow you to use MT4, do they? Plus, brokers want to leverage me in at 400:1. I want 100 or 200:1
I’m looking for a good broker that will allow MT4. This is the platform I’m most comfortable with.
Can anyone recommend a broker?
My parameters for my ideal broker:
I’m starting with $1000 - $2000
I’m trading mini lots
200:1 or less leverage
MT4 platform
Prefer “Reputable” (not necessarily large, but over $8m investments) company
Not many will be able to make the cut when capital requirements of 20M$ soon kick in.
A personal reflection: will you really trade mini lots on a 1000-2000 $ account? That would require very tight (maybe to tight) stops to keep risk below say 2-3%. Could a broker offering micro lots be a good idea?
I’m in Europe, so I can’t really recommend any specific US broker. But the link above would be my starting point, if they might not make that cut, I would not consider them.
There are rumors that MB Trading will soon offer MT4, if they make the capital requirements, they might be worth considering.
Perhaps I don’t understand correctly, but I believe “leverage” is whatever you want it to be, up to the limit the broker gives you. If you are buying a standard lot (100,000), a leverage of 400:1 means you must have [B]AT LEAST [/B]$250 in your account. (250x400=100,00) If you have more than that, great. If you have $1000 in your account, then your “leverage” is 100:1. (1000x100=100,000) A mini account is one-tenth of a standard account, but the math is the same. So, “leverage” only means the lot size (100,000, 10,000, or 1000) divided by your account balance. Just cuz a broker offers 400:1 doesn’t mean you have to use all of it. If a broker offered 1000:1 leverage, and you were to buy a standard lot while having $100,000 in your account, your “leverage” would only be 1:1, despite the fact the broker would still allow you to do the deal with only $100 in your account (1000:1).
I think I have this correct, and the dollar amounts I gave are not exact–it depends on what pair you are dealing with.
Anyways, if I am full of stool I’m sure somebody will let us know.
I’ve been using IBFX, live, on a micro account for the last two months. I don’t have any complaints. They use MT4 as well.
Why do you want to reduce your leverage? If anything you want more. I’m guessing because you think it will reduce your risk? If so, that is incorrect thinking. Leverage doesn’t dictate risk, how you set up the trade does. High leverage is only dangerous if you use it to it’s fullest extent.
You could have 1000:1 leverage and still only risk 1% of your account per trade if you wanted. A leverage of 400:1 just says that for every 400 dollars you trade you are required to have 1 on your margin account.
Lot size determines pip value. That is what you will be risking or making per pip. Leverage does not change this. More leverage just enables you to trade larger sized lots with less margin.
For example on my micro account I’m currently trading at $1.00 per pip. My micro lot size is 1.00, which equals $1.00 a pip. My leverage is 400:1. If I contact the broker and tell them I want it set to 100:1 and trade at 1.00 a pip, I still make or lose $1.00 per pip. The only thing that changes is that I need more money in my margin account to cover a trade. So, I might get margin called sooner.
Think of leverage as a percent of downpayment your broker requires you to have already in your account. 100:1 leverage is the same as putting up 1% of the lot. 400:1 means only putting up one-fourth of 1%. As you can see, the amount of “leverage” you have/use is up to you— and how much cash is in your account—the broker only limits how much he/she will let you get away with. Choosing a broker cuz you want [B]LESS[/B] leverage doesn’t really make sense.
Anyway (and seeing as this “corpse thread” has INDEED been resurrected and some new traders are going to stumble across it I may as well try to add something of value here).
Phoenix is 100% correct. Leverage in and of itself is not a problem. Whether you’re trading with 1 500:1 (that’s the “all time high” I’ve seen offered by some or the other “bucketshop”) or 1:1 it makes no difference. It’s how much you risk per trade that’s important. The PROBLEM though is that “bucketloads” of leverage WILL entice a new trader (or even tempt a seasoned trader) to overtrade their account “just because they can”. It’s an unfortunate reality that most new or undisciplined traders will look at the amount of their capital that is being used as margin to keep a position, see how much capital they have left at their disposal (capital NOT tied up in a trade), and open more trades or risk more per trade “simple because they can”. The end result is usually the same i.e. “wipeout”.