Multiple accounts

[blueridge]

One of the books I’ve read states that if your account grows too large (subjective I know because what is defined as large? $5,000? $15,000?) you should open multiple accounts for several reasons.

One is to “not have all of your money in one nest” and this makes sense because if the Forex dealer goes broke or bankrupt you would not lose all of your money.

Another is that when a trader posts a buy/trade, the dealer works against you and because the dealer is the upper hand…you do not want to have too much money in one account.

The reason goes on and on. Still someone suggest to withdraw money from your account as you are accumulating profits.

My question to you Forex traders: is it difficult to have several accounts? I know the difficulty in having multiple accounts with different passwords and managing all of those accounts because I work in IT and know the headache we go through. However to me it would make sense to have one account and if you accumulate too much (gains from winning trades and deposits in your accounts for example) you can have more money to go into trades because you have higher leverage (assuming I would still keep at 2% risk of my account.)

So how many go to great length to have multiple accounts? If you have 2 accounts, do you have them both open at the same time to make trades? This would be a nightmare to me when the market is constantly moving.

for me I plan to start with $2,000 and start out with 2% risk which brings me to $40 risk to my account. That seems to be rather small and possibly mean I need to start at a nano account, is that the right thinking? Can an account starting at $2,000 start in a say mini account?

Thanks in advance for your inputs.

[Jason_Rogers]

@blueridge

One of the books I’ve read states that if your account grows too large (subjective I know because what is defined as large? $5,000? $15,000?) you should open multiple accounts for several reasons.

Hi Blueridge,

What book is that and when was is written? I ask because retail forex is constantly evolving. In the 11 years I have been in the industry, there have been many improvements in the services available to traders which address the concerns you raised.

@blueridge

One is to “not have all of your money in one nest” and this makes sense because if the Forex dealer goes broke or bankrupt you would not lose all of your money.

Safety of funds should be of paramount importance to all traders.

You’ll be happy to know that as one of the only retail forex brokers in the world that’s a publicly-traded company (NYSE ticker: FXCM) regulated on three continents, we make our financials transparent so that clients and potential traders know about the performance and health of FXCM as a company. This is a key reason why retail forex traders have more money on deposit with FXCM than any other US-regulated broker according to the latest financial data from the CFTC:

For a full in-depth look at FXCM’s financials, recent press releases, monthly customer trading metrics and SEC filings, you can visit our Investor Relations page.

@blueridge

Another is that when a trader posts a buy/trade, the dealer works against you and because the dealer is the upper hand…you do not want to have too much money in one account.

What you have described is the conflict of interest that can potentially exist with dealing desk execution where your broker takes the market risk on the other side of your trades. However, we provide No Dealing Desk (NDD) forex execution to all standard FXCM accounts. On the NDD model, we immediately offset each of your orders one-for-one with the best prices from competing liquidity providers.

Since we don’t take the market risk on the other side of your trades, we don’t profit from your losses, or lose from your profits. Instead, we charge you a commission and profit from your trading volume. That means, we want you to be profitable, so you can continue trading with us.

@blueridge

The reason goes on and on. Still someone suggest to withdraw money from your account as you are accumulating profits.

You’ll get no argument from me on this one. I do this myself.

@blueridge

My question to you Forex traders: is it difficult to have several accounts? I know the difficulty in having multiple accounts with different passwords and managing all of those accounts because I work in IT and know the headache we go through. However to me it would make sense to have one account and if you accumulate too much (gains from winning trades and deposits in your accounts for example) you can have more money to go into trades because you have higher leverage (assuming I would still keep at 2% risk of my account.)

FXCM allows clients to manage multiple accounts using a single login on our Trading Station platform, and our MyFXCM.com client portal makes it easy for you to transfer funds between your accounts.

@blueridge

So how many go to great length to have multiple accounts? If you have 2 accounts, do you have them both open at the same time to make trades? This would be a nightmare to me when the market is constantly moving.

While I don’t have an exact number for you, FXCM has many clients who have more than one account with us. One reason is so the performance results of different trading strategies can be evaluated separately. This is why I keep multiple accounts. I have several automated strategies, so my accounts run concurrently.

@blueridge

for me I plan to start with $2,000 and start out with 2% risk which brings me to $40 risk to my account. That seems to be rather small and possibly mean I need to start at a nano account, is that the right thinking? Can an account starting at $2,000 start in a say mini account?

Thanks in advance for your inputs.

Please clarify what you mean. Is your intention to deposit $2000 in your trading account and risk $40 per trade? If so, that’s possible with FXCM. With $2000 you can open a standard account to take advantage of our NDD execution. We offer you the ability to trade micro lots, so you can risk as little as 10 cents per pip.

[Toekan]

Blueridge,

When your trading becomes more important to you it is wise to work with multiple brokers and banks. This is addressing the counterparty risk. The measure is ment to ensure continuation (even at a lower level) when there are issues with one of the parties you work with.

I understand what Jason is saying, but there is more to consider than just ensuring that your money is safe. Two examples:

1. For reasons unknown to you your account may be ‘Under investigation’. Not saying that this happens with FXCM, but you placed this thread here. As long as your account is under investigation you will not be able to trade or withdraw leaving without income until your account is released again.
2. When your broker (It can happen to all of them) goes out of business. Your money is still safe, but you cannot withdraw it or trade on your account. Again, no income,

So spreading your eggs is necessary when trading as a professional to ensure that you can do your business even when you have issues with one of your brokers.

Is it worth the trouble? To me that is not important. Being able to continue trading is much more important, so I jsut have to deal with working with multiple accounts (which I automated, but that is another story).

When it is time for you to do this is up to you. I wouldn’t worry about it too much now. Just choose a legit broker and you will do fine. But when your trading start to become serious, consider the above.

PS Another risk to consider is the risk of overtrading. Starting with $40 a trade as a beginner is risky.

[blueridge]

Jason,

I have read several books but forgot who the authors are for those books however I know one author of one of the books and his name is James ****s. As for the date the books were printed, most were printed between 2010 to 2014 and my reasons for skimming over these books are twofold. First is everyone has an opinion on how to be profitable in Forex. However I know not everyone’s view of getting profitable applies to everyone and especially newbies like me

Secondly, most authors, if not all, are vetted by publishing companies. With this vetting, I know the publishers did their due diligence since they make money by the sales of books. I know on the internet anyone can put their ideas up on the 'net and who knows, maybe they are just learning and never actually made Forex a career. Mind you, I am not talking about Babypips website because I have seen this website listed in the index of books I have read. And besides I have actually seen how several of the contributors on Babypips give sound advice and apparently know their stuff.

I have a tendency to want to investigate things before I jump in. And therein lies my opinion of why 95% of people fail in Forex…they jump in without truly understanding the nuisances of Forex trading. Its easy to see why many people fail in Forex when you look at these big Hedge firms often going out of business and returning capital to those who have invested in the firms. So I am taking this sort of slowly but I am ready to start a FXCM demo account which is why I am trying to see what is the best leverage to start with.

Here is what one of my engineering professors posted on his office door: “If the math don’t work, nothing else matters”.

So I hope you all do not get too tired of my questions because this is how I learn.

Thanks for your help Jason.

[Jason_Rogers]

@blueridge

I have a tendency to want to investigate things before I jump in.

In that case, you might be interested in some statistical analysis performed by the strategists at DailyFX.com:

“Our studies on 10’s of millions of real trades showed patterns which we believe highlight the Traits of Successful Traders”.

@blueridge

So I am taking this sort of slowly but I am ready to start a FXCM demo account which is why I am trying to see what is the best leverage to start with.

"Our data showed that 40 percent of all traders who used an average per-position Effective Leverage of 5:1 or lower turned a profit in the 12 months captured. If we move above 25:1, that ratio drops by more than half to a mere 17 percent.

[emimahmudah]

Do multiple account very interesting for clients??
we can’t trade all those accounts in same times, we will make trouble with it.

[Jason_Rogers]

Do multiple account very interesting for clients??
we can’t trade all those accounts in same times, we will make trouble with it.

Hi Emimahmudah,

While trading multiple accounts is not for everyone, some traders like to keep their trading strategies separate. Having multiple accounts helps these traders compare the performance of their different strategies.

[Toekan]

Hi Emimahmudah,

While trading multiple accounts is not for everyone, some traders like to keep their trading strategies separate. Having multiple accounts helps these traders compare the performance of their different strategies.

Yup, that is true. It is easy to mix up strategies and scripts with combined approaches are much more complex.