I don’t know @A1lenTrader - “micro lots” are worth around $0.10 per pip and if I’m reading this aright, require a margin of $30 each to trade. ($33.333 ? But I’m just rounding the figures for simplicity) Plus a “reserve margin” to avoid what they call a “Margin call” ( which apparently no longer means what I understood it to be - ie The phone rings and a polite voice informs you that your deposit is now in danger and would you like to add more funds or close the position ? According to babypips school that is no longer the case - they just shut you down and term it as a “Margin call” - wierd ! )
Certainly I would not feel comfortable trading more that 2 “micro lots” in a $100 account ! and most likely just 1 !
Nobody seems to have picked up that the “Badness” of this blanket regulation depends on the way you trade - a 10cent per pip trade to what we seemingly refer to as a “scalper” with a 5 pip target - ie $0.50 is completely different from a 10 cent trade on a swing basis where the target might be 100 pips - so $10 or a positional trader who may be looking to take 500 - 1000 pips !
The person I feel for in reality is @tommor, who is quietly trading something akin to a “Turtle system”, where he pyramids in and raises his stops, so that after his second “Pyramid”, he is locked into guaranteed profit and needs multiple iterations in order to have a “big hitter” which then pays for all his multiple losses and puts his account on a steady growth path.
He already has to consider his Margin and says the only time he willingly closes a bet is when he is deep in profit and needs to free up “Margin” for further pyramiding. - I think this will be entirely unfair to him, since it will mean that he is forced to lose money (against what he “could have won” ) if the regulation had been more lenient - even though he is in guaranteed profit with no conceivable chance of a loss except in the unlikely event of a “Swissy” !
There are traders here trading standard lots on shortish time frames and doing “Quite nicely” who would need to maintain a £3000 (Plus a bit) account in order to do “their thing” - but 30 pips at $10 would give a $300 return ie 10% on $3000. That seems an ok sort of level as well.
So in reality, it is the very small “scalper types” who would be most affected and we already know they are the brokers’ Least favourite punters, so perhaps the underlying reason for this Regulation is to get rid of these “annoying mosquito” type traders - from the brokers’ points of view!
(Yes I know I have not accounted for spreads and commissions ! )
I’m thinking @A1lenTrader must fall into this category and sadly I think you will need to switch to longer time frames.
{Anyone want to buy a “good used condition” copy of Bob Volmans’s “5 minute timescale” book ? }
please, just ignore me, I’m just a fussy old gandalf…
