My first live positions ever, today, 24th Dec. 2013, with FXCM

2 things:

[B]1. Effective Leverage vs. Maximum Leverage:[/B] FXCM does not have a “fixed 200-to-1 leverage”. Rather, our minimum margin requirement (MMR) for opening a trade allows you a maximum leverage of approximately 200:1. For example, as you can see in the Simple Dealing Rates window of Trading Station (shown below), the MMR for GBP/USD is £5.00

Since the minimum trade size is 1k GBP/USD, that means you can control £1000.00 in the market and only have to set aside £5.00 as used margin (Usd Mr). That means each pound you set aside can control £200. So your maximum leverage is 200:1. That’s not to say you should use all the leverage available to you, because that would leave you with no usable margin (Usbl Mr) to withstand drawdowns.

(Usable margin is what’s left of your equity after subtracted the used margin that has to be set aside for open positions. So if you have £600 in equity and with one trade open for 1k GBP/USD, then your usable margin will £580 after setting aside that £20 used margin. If you lost that £580, then your usable margin would drop to zero and the system would automatically close out your trade to prevent further losses.)

Since it’s not wise to max out your leverage when trading, what’s important to consider is what effective leverage you want to use. For example, with £600 in equity and one trade open for 1k GBP/USD, your effective leverage is 1.667-to-1 (or £1000/£600). If you have 2k open, then your effective leverage would be 3.333-to-1 (or £2000/£600). Personally, I try never to exceed 10-to-1 leverage on my account, so with £600 in equity, I would never open more than 6k total. Otherwise, I might be risking too much relative to the size of my account.

[B]2. Equity vs. Balance:[/B] As I mentioned before, balance is really a look into the past. I don’t pay attention to that column in my accounts window at all. Much more important is the Equity column. That is the real money in your account. Based on what you’ve said, I would say that you’re up £64.00 (still fantastic!) not £102.39.

Dear Jason,
thank you for this useful clarification.
I actually have completely discounted the leverage amount (that is why I said 200-to-1 without fear) in my trading… In other words: by trial and error, I worked a system where I know that, at 1k per position, even a 300-pip move is not going to do much damage at all to my available margin… So the leverage is not something I see in practical terms (whether 200 to 1 or other) because I go by lot size in relation to the overall size of the account. This cautious approach, while not mathematically very subtle, has kept me trading out of sticky errors, thanks to the low risks taken. I have read everything you said and I understood some of it but I will have to go back to it and digest it, as it is not something I work with.
I will make an effort to digest it, though, as anything from you is worth gold - and any advice from my broker is worth listening to!

Ps: re-read the info with a fresh, morning brain and it makes perfect sense. Thank you, Jason, for taking the time to write it out - I think it will be useful to others too (FXCM users or other).
Happy Trading!

What you’ve described here is effective leverage to a tee. It seems like you’ve already been taking your effective leverage into account, even though you weren’t using that exact terminology to describe what you are doing.

The account is going from strength to strength! Attached is a screenshot, showing my balance and equity, as well as all my current floating positions (with P/L shown in Pounds, rather than pips).
Thank you, FXCM!!

A pair of Air Jordans won’t help a bad basketball player win the NBA championship. We may have provided you with the equipment, but your trading success is all your own. Congrats! :cool:

As long as its making money do whatever you desire my friend.

Hello Ayyaz7!

Yes, you are right, and it is!

The latest stats… see photo…

All is well…

If using my current equity (= Balance minus Floating/Open Positions total) as the total sum, I am

up c. 19% in profit from the initial deposit (600GBP); if using my current balance, I am up c.26%

in profit from the initial deposit… All of this, trading since the 24th of December, so less than one

trading month.

This is not a miracle and I am not amazing, but it is certainly not something I am winning through

sheer luck, every day! I must be doing something right… So I hope, at least… May those hard-won

pips be the start of many more. The strategy is: steady does it (few pips regularly is better than lots

of pips once in a blue moon). I do not have a daily pip target, but certainly I hope to be in profit

every day, if possible.

Happy trading!

What a day!
I made a stupid amount of money!

[B]+68.52 GBP[/B] (Pounds), and counting…

Traded pairs:


A Fantastic Day!!!
Account balance now up to 806.50 (from the initial 600 GBP[/B] when I started trading on 24th December), with
the Equity not far behind, at 779.40 GBP.

So, from the balance, the account is up 34,41%; from the equity, up 29.9%.

[B]Long live the Forex market.
Happy trading.

Your challenge will be… How are you going to beat this performance next month!

Good for you :slight_smile: I guess I have to put my A game next month lol…

Wow, an excellent month! Good luck for next month. :slight_smile:

Thank you PipNRoll, and KevinLaCoste!

Believe you me, I am not bragging!! I feel it a must to share my successes (and my failures) with the forums… Not for validation or self-boosting, not for self-publicity, not for marketing FXCM (they do not pay me), not for any other reason other than to give hope to others that it can be done. . . and if I can do it, without an economics degree, then I am sure many others with my same tools and sense of observation (and good risk management) can also do it.

As PipNRoll and you say, let us see how I will perform next month!

PipNRoll, you are a Forex Mistress, an Honorary FX-Woman! I will bow to you now and be done with it…

No… I don’t think it is bragging at all! It is really impressive getting that kind of return first time going live! So, I really applaud you for that… And Mr. Jason Rogers over here should give you a nice bouquet of flowers just for incentives plugging away FXCM lol…

I can’t stop laughing calling me a Forex Mistress! Oh god… It’s cute and it’s funny!! thank you…

I felt so ashame now lol… Keep it up!!

Jason… you heard the lady… Roses will do fine, but I am not fussy…

Seriously, though, PipNRoll, I admit that it is impressive, considering that I work full time and only trade as and when I can!

And that is why I would recommend demo trading: I had sixteen months of it before going live… Did it help?

I think it is too early to say, but certainly it feels like it has…

Thank you for all your encouragement and inspiration, my FX-Mistress…

Ok, I will stop now …

Great job! Just remember: Equity, not Balance :wink:

Great bouquet, Jason, thank you!

I am a happy man…

it must be the flowers… or today’s P/L… or both!

Time to stop looking at charts :30: and go to bed, repeating this in my sleep: “Equity, Equity, Equity”…

Succumbing to greed (Newbie Error).

My mistake? Over-exposure! Last night, after a splendid trading day (truly splendid), just a few minutes before midnight - I had been watching the charts for a while - I was taken by the urge of buying a rather large amount of NZD/JPY… 50k, to be precise… I could soon hear the creaking noises as my account groaned under a shrinking margin…

I hear you say: “We know what happened next”. Aye.

So it did: the NZY/JPY tanked, sloping downwards to the point that I just had to close part of my position and, eventually, all of it… Total loss? [B]-183.69 Pounds[/B] …

A lot of good work undone in such a short time…

One word:


So today I have been plugging away, trying to minimise my battered ego and keeping an eye out for opportunities…

Of course, in a bid to recoup the losses, I overleveraged myself again on trades that are not necessarily going against me

but are proving very slow at developing… :rolleyes:

Emotions and trading? Tut Tut :58:

[B]Emotions and love? Oh yes[/B]. :60: Give me some!

Okay, so that is me checking out but I know it is not the end of me, and I will learn from this!

[B]NEVER OVERLEVERAGE YOURSELF[/B] (or, at least, keep those stops very, VERY TIGHT)…

So, are you done whining? Dust it off and pick yourself up…

It’s normal. This is what happen when you had have strings of winnings that you think you are invisible but you are not… At some point the market will take all of it and then some. Your strategy has been working for the pass few weeks. It’s your pschycological side of trading is the one who messes it up ( Greed). Ive done this before many many times… I was in a hype gaining 17-22 % in a few months then it all wipe it out…for some reason I knew this is going to happen to you too but I didn’t know it was too soon… Like today…

How do you go from here? Well, take a break… Cry, grief, feel pity for a day or 2 then get over it… Now, another challenge for you next month will be… How are you going to maintain not losing and protect your capital and at the some time earning some profits again… Not the same 30% or so but made at least some profit. Revenge Trade is not the solution…Consistency is the key…

The book called " Trading in the Zone" is I think an appropriate book to read at this moment :slight_smile:

Rinse, repeat and [B]KEEP[/B] what you have…


I have used baby pips forums for over 24 months now and have finally registered just to reply to your recent disaster.
Has happened to me plenty, im still learning and some pros would call me more a gambler rather then a trader - they are probably right lol

Regardless, as long as we learn from our mistakes and keep going forward.

“A fool isn’t one who makes mistakes but rather doesn’t learn from his mistakes” - some wise guy,

My first $1000AU I dumped on forex was gone within a month Lol , i had it up 80% in 3 weeks part time trading high risk scalping - then my two weeks hard work came crashing in around me. Cheap lesson in terms of a long term forex hobby!

Happy trading mate.

Thank you, PipNROll and Aussienoob!

No, I was not wanting sympathy, but I did not want to lie and say that I was just having winners…

My thread is ‘warts and all’ :slight_smile: But you have to come clean about these things, because a lot of people go through these

situations and they want to read that they are not alone, so I thought I should do the honest thing and share them!

PipNRoll, ha, yes, you are right, the psychology… I will try to read that book, but I cannot promise it will be soon!

Thank you for the recommendation!! That is what having FX-Honorary-Women on board is for… to counsel us in

the art of Forex psychology…and the rest!

Aussienoob, your experience sounds horrendous! Did you keep going soon after that? Are you doing ok now?

Thanks for the comments…

Happy trading.