When size gets big, slippage is the cost to transact. Comes down to competition for liquidity. Positions are held until levels where opposing orders can absorb or demand their liquidity to negate slippage.
If you’re good enough to build a big account, the Psychology changes too. Watching your 1k account lose 5% because you had a really bad day isn’t fun. When that 5% is thousands of pounds, it changes how you feel. It makes you more likely to cut a good entry because it doesn’t go immediately right and makes you refuse to accept losses thus risking more.
Nobody with a 7-figure account (and working braincells) would trade spot forex CFDs. They all switch to futures. No exaggeration, I really do mean “all”.
It would be crazy not to. Follow the links in this post -
th only thing that changes when your funds are bigger is risk management and stress management and emotion management become very hard, far apart this as long as you are working with percentage it does not matter how big your money is
On the contrary: the main thing that changes (especially if you’re “trading” CFDs) is actually slippage.
This can easily make the difference, for a fast-moving system, between overall profit and overall loss.
As all the experienced traders here keep saying, every single time this subject comes up (i.e. once per day or more), no amount of successful stress-handling or emotional control can enable anyone to avoid losing money if they don’t have a genuine, proven edge that allows for slippage.
(And for what it’s worth, I’m pointing this out as a psychologist, myself!).
This is what annoys me about the sarcastic if you could do 50% a month, you’d be the richest person on earth in 2 years. It’s not possible because firstly slippage increases and secondly there’s a maximum position size that your broker allows. So at some point an account size is maxed out and all you can do is 50% per month on that.
For the record, I can’t do 50% a month. But I know people who can do around that without being reckless traders.
I’ve been here for like a month and I can already tell joining this forum is going to save me a lot of pain.
Thank you guys so much! I recognize the generosity of time spent answering our novice questions.
For example, this surprised me:
I would have expected it to be a more minor factor.
So…
At what size does it begin to require real adjustment for? (Just an example, I’m sure it differs.)
How much adjustment does it require? (Preferrably described in terms of a metric like profit factor/R:R or whatever works.)
I started this thread because I am trying to become more comfortable taking larger positions. I am already taking the largest shorter-term trading positions I’ve ever taken and I have the capital to add a couple zeros to them. I want to at least have an idea of some of these things as I slowly work my way up to it.
Good info! What do these limits look like? Standard across all forex brokers? Or across all brokers regulated by the same agency perhaps? Or just all different?
I don’t understand. Why do you want to trade CFD’s, then?
Why not avoid about 99% of the potential problems and just trade futures instead?
It’s not a “whole different skill-set” or anything like that: essentially, if you can trade one, you can trade the other, and without any of these difficulties that obviously (and very wisely and appropriately!) concern you.
I don’t know what I want to trade yet I’m still trying to figure out where to graduate to.
I’ve been eyeball trading BTC pretty well with basic support and resistance. But I’ve only been going long because I wasn’t sure whether I trusted crypto derivatives. Then, I realized I hardly even know what a derivative is.
Rabbit holes ensue… which inevitably lead to more rabbit holes (while I was already exploring several other rabbit holes).
This question comes at the intersection of several of them.
As my account grows, I have noticed losses feel more emotional, even when I am risking the same percentage. Bigger positions also come with issues like slippage and slower fills.Sticking to trading plans feels difficult but it’s important.
He’s built a £10k account into £25k so far this year and I’m fairly sure he’s withdrawn a load too. I know people who’ve done even better, but this is the best ‘proof’ that it is possible.
Okay, so it seems like the game changes a little when our trading accounts get bigger, doesn’t it? Slippage, or entering and exiting trades cleanly, suddenly becomes more important, and those losses undoubtedly feel different. Additionally, when we scale up, what worked in the beginning may need to be modified or perhaps a completely different strategy. Everything is a part of the trip!
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