So if I sign up for a live account and deposit £1000, how much actual money can I trade with?
The demo account comes with £50,000 which allows me to buy £5000K which is £5million but I only actually own £50,000. So just for example if I were to lose 2% (£100,000) on a trade, I’d owe the broker £50,000, after all it’s his money. So what then? My home is seized and my bank is charged or what?
Or can you physically not go lower than your initial deposit, in my case 1% (£50,000)
I appreciate you taking the time to explain it to me but I really must know what happens because I’m ok with losing my initial deposit, I’m not ok with owing the broker thousands because a trade when terribly wrong.
Jason, I made a fresh new demo account, this time with an equity of £2,000 and it’s still the same success, just for lower amounts. I’m going to attach some screenshots, please tell me what I am missing or not understanding because it simply cannot be this easy…
One thing I have noticed is for some reason I’m not being charged any commission on my trades? Why is that? Also I would just like to point out that I would prefer to make 15 trades a day and only make £50 profit on each trade as opposed to 2 trades of £375 profit.
As you can see I am placing small trades of 100 to reflect my equity whereas before I was placing trades of 3000 because I had £50,000 equity. So Jason, please tell me am I just having beginners luck or what? What am I missing?
Our service includes products that are traded on margin and carry a risk of losses in excess of your deposited funds. The products may not be suitable for all investors. Please ensure that you fully understand the risks involved.
FXCM UK and FXCM Australia offer clients up to $50,000 in negative balance protection* on forex trades. Full details can be found in the master trading agreement of the account application.
[I]* Negative balance protection is not available to clients of FXCM US or any other US broker due to CFTC regulations which state that a broker may not in any way represent that it will guarantee against losses.[/I]
Appreciate the reply but you ignored 95% of my question. Can you tell me about the trades I’m making? I’m not looking for advise, I simply want to know if the P/L I’m making is actually legit and I’m not over looking some tragic mistake?
I’m going to continue to use the demo account until I can turn that £2000 into £10,000. If I can do that then I am comfortable placing £1000 of my real money on the live account.
I understand you must be busy so I really do appreciate your time.
The first thing I notice when I look at the Actions window on your demo is that you changed your stops. Why is that? My guess is that you change your stop when a trade moves against you so that you don’t get stopped out.
You also changed your limits multiple times. Why is that? My guess is that you initially had a more ambitious profit target in mind and then later revised it to settle for less.
If that is the case, it means you are taking huge risk for little reward. In the short term, that often leads to a string of (small) winning trades, but it’s only a matter of time before you enter a trade that continues to lose money.
Based on how you adjust your stops and limits (or at least the way, I’m guessing you do) your poor risk management would ultimately lead to you taking a huge loss on a trade that will more than wipe out the profits from your small winning trades.
If what I have said about your risk management approach (or lack thereof) strikes a chord, then I encourage you to take this time on your demo account to learn proper risk management.
The new demo account you set up is for a Mini account. While our Standard accounts offer you low spreads with separate commissions, our Mini accounts offer you all inclusive spreads with no commission.
You asked multiple questions, so I thought it best to respond to them separately for clarity. Above, you will find my responses to your other questions.
You’re right I do change my stop and limits a lot and this is because when I first open the trade I usually set the stop/limit but notice if it starts charging negative or charging forward then I’ll actually increase or decrease my limits.
I’d prefer to lose less and make less than lose more and make more. I’m more concerned with how much I can lose rather than how much I can make. I might set my limit to +10 pips and then decide actually that’s too high and will reduce it to 5 pips. Likewise I might set a stop limit at -10 pips and see the trade diving south so I’ll actually decrease the stop to -5 pips.
I don’t know if this is good or bad or if it will bite me in the butt later down the line but 2 days in a row I have made consistent profit. First time around with £50,000 equity I made £3000 and today with £2000 equity I made £312.
It might be risky as hell but I don’t have tens of thousands of pounds to throw into it so I can either take very safe trades and make £10 a day or very risky trades and make £300 a day. Cheers for the replies, I’ll see how I get on tomorrow
Update
I decided to trade again on my demo account, exact same “strategy” as yesterday and the day before and low and behold, another £400 profit in less than 2 hours. I’ve googled my “strategy” and it seems that the type of trading I’m doing is known as “scalp trading” and it seems to be working tremendously well for me. Whether it’s risky or not, it’s working…
That said, scalping is a legitimate strategy. What you are doing is not scalping and is not a real strategy, since you have no risk management plan. This makes it closer to a martingale, which is just gambling: Martingale (betting system) - Wikipedia
To confirm this, consider tickets 79779814 and 79780124 on your demo account statement above. Both are 100K short trades in EUR/GBP. You opened ticket 79779814 first but closed it second? Why?
I’m guessing it’s because the market moved against you and you didn’t want to take the loss, so you doubled down instead. That’s gambling, not trading. What would you have done if the market continued to move against both short trades?
I stand by my earlier assessment of your recent demo results.
