Max. Leverage Amounts and Withdrawal Limits?

[pkrillo]

Hello

I am in the process of registering with a broker right now and recognize that choosing the right one is one of the two most important aspects of success in this market, the other being a solid trade strategy/plan.

I’ve looked at what several websites and forums have said about and how they have rated several different ECN brokers, based on a variety of criteria.

To me, however, things such as commission fees, slippage, and spread amounts aren’t really a huge concern of mine, given the nature of my trading plan.

What I [I]am[/I] concerned about, however, is whether or not there are “maximum leverage amounts” and “withdrawal limits.”

What I mean by “maximum leverage amount” is not [I]by[/I] how much your account can be leveraged (such as 100:1 or 200:1), but the actual maximum [I]dollar amount[/I]. For instance, hypothetically, if one were to at some point in his/her trading process hold $10,000,000.00 in an account, could that money actually be leveraged to be worth $1,000,000,000.00 (100:1) or even more? Is there a limit to how much [I]money[/I] the broker can actually “provide?”

By “withdrawal limits,” I mean are there usually limits in place as to how much (in dollar amounts) any client is able to withdrawal from his/her account to a bank account (or through a similar process of getting funds out), such as weekly or monthly? If so, if someone were to actually become a Forex “millionaire,” wouldn’t it take him/her several decades just to withdrawal the money from his/her account, little by little?

These things seem to me like the most important issues to address for those who are trading with (and gaining) significantly high amounts of money.

Does it actually depend on how large the broker is? I’m looking at major and renowned ECN brokers such as MB Trading, Interbank FX, Interactive Brokers, Dukascopy, ACM, and ATG, among others. Would these fairly reputable and large brokers put any significant “limits” on how much money you can withdrawal in a given period of time or have trouble leveraging an account of seven, eight, or nine figures by an additional two figures?

I am also looking at smaller brokers such as Fastbrokers, FXCast Ltd., EFX Group, Forex Club, and FXDD, but the primary criteria remains whether or not they are prepared to handle the kind of money that I plan on trading.

Thank you in advance to anyone who can tackle this query!

[phil838]

I am in the process of registering with a broker right now and recognize that choosing the right one is one of the two most important aspects of success in this market, the other being a solid trade strategy/plan.

The most important aspects of trading are money management and controlling your emotions, but that’s not really relevant to your question…

What I mean by “maximum leverage amount” is not [I]by[/I] how much your account can be leveraged (such as 100:1 or 200:1), but the actual maximum [I]dollar amount[/I]. For instance, hypothetically, if one were to at some point in his/her trading process hold $10,000,000.00 in an account, could that money actually be leveraged to be worth $1,000,000,000.00 (100:1) or even more? Is there a limit to how much [I]money[/I] the broker can actually “provide?”

Most brokers I know of have a 50 standard lot limit per trade, which would be a 5 million dollar contract. I also think I read somewhere that 50 lots is the limit for any broker that uses MT4, but I may be wrong on that.

Keep in mind though that you can open as many 50 lot trades as you want in row, there is no limitation on that, but the previous order must be filled before you can open a second one. Just remember that a 5 million dollar contract is probably not going to get the same instant execution that most of us are used to. Even market makers will pass that along to the real market, and not keep the trade inhouse.

By “withdrawal limits,” I mean are there usually limits in place as to how much (in dollar amounts) any client is able to withdrawal from his/her account to a bank account (or through a similar process of getting funds out), such as weekly or monthly? If so, if someone were to actually become a Forex “millionaire,” wouldn’t it take him/her several decades just to withdrawal the money from his/her account, little by little?

I’ve never heard of anyone that had too much money to take out at once, but I have heard rumors of people that were forced to close their account because they got too high. I don’t know if they’re true or not, but it wouldn’t surprise me if they were.

[pkrillo]

Thanks a bunch for the reply, that really cleared up a couple of misconceptions for me. However, I was concerned about a couple of things you mentioned:

Just remember that a 5 million dollar contract is probably not going to get the same instant execution that most of us are used to. Even market makers will pass that along to the real market, and not keep the trade inhouse.

By not receiving “instant execution,” how long exactly might the trade be delayed by? Does this mean that the lag could be minutes, hours, or even longer?

I have heard rumors of people that were forced to close their account because they got too high. I don’t know if they’re true or not, but it wouldn’t surprise me if they were.

Yes, I had also heard about some situations along these lines, primarily from negative comments people had made regarding certain dealing desk brokers. But if one’s account were to actually be “closed,” would the money in that account still be returned to the client in its entirety, or would the broker pocket that?

[phil838]

Thanks a bunch for the reply, that really cleared up a couple of misconceptions for me. However, I was concerned about a couple of things you mentioned:

By not receiving “instant execution,” how long exactly might the trade be delayed by? Does this mean that the lag could be minutes, hours, or even longer?

Yes, I had also heard about some situations along these lines, primarily from negative comments people had made regarding certain dealing desk brokers. But if one’s account were to actually be “closed,” would the money in that account still be returned to the client in its entirety, or would the broker pocket that?

I can’t say how long it would take… I don’t trade that much money yet, and I don’t know anyone else on these forums that does.

For your second question, the money would be returned to you. A legitimate, regulated broker would be shut down in a heartbeat for stealing money like that.

[pkrillo]

Thank you for the info!