Gabrial
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Not sure if this is what most people do. If my trading account is $100,000 , then I keep $85,000 at my local bank account, which is relatively safe. Put the remaining $15,000 with the broker.
High leveraged broker helps as it means you have to deposit less with them. If the account grows then take proportional money back into your home bank account. If you lose money trading then top it up with the money from your home bank account. Safer than leaving the entire $100,000 with the broker.
This is of course assuming low risk per trade, less than 5% of the account. 5% of $100,000 that is, per trade. If you are risking 50% per trade then this strategy wont work well.
So for a 100 pip stop loss, my position size is 5 lots. So from a 100:1 broker I need a $5000 margin. from a 500:1 broker I need $1000 margin. Higher the leverage the less money is at risk staying in the brokers account.
High leveraged broker helps as it means you have to deposit less with them. If the account grows then take proportional money back into your home bank account. If you lose money trading then top it up with the money from your home bank account. Safer than leaving the entire $100,000 with the broker.
This is of course assuming low risk per trade, less than 5% of the account. 5% of $100,000 that is, per trade. If you are risking 50% per trade then this strategy wont work well.
So for a 100 pip stop loss, my position size is 5 lots. So from a 100:1 broker I need a $5000 margin. from a 500:1 broker I need $1000 margin. Higher the leverage the less money is at risk staying in the brokers account.
