jthetrader
Active member
- Messages
- 221
- Likes
- 8
What is the execution like on OANDA? Is there much slippage? And what's the biggest position you can get?
How Much Trading Capital Is Needed in Forex Trading?
What is the execution like on OANDA? Is there much slippage? And what's the biggest position you can get?
Cornix
Well-known member
- Messages
- 267
- Likes
- 22
Rarely there is any significant slippage (beyond a few pippettes), even in relatively fast market (like lately). I am not sure exactly about the max position size, as never traded that big, but something in the range of $5M+ notional per order. Way enough for most people who ask what broker to choose on Internet forums anyway.
flemming
Junior member
- Messages
- 20
- Likes
- 0
The question of how much to start is a flawed question. The answer is $0 if you don't have a good track record and a proven trading system over at least 6 months of trading (not just backtesting). If you do have a profitable track record then the answer is as much money as you can get! The great thing about forex is the costs in the business are proportionate to the size you trade with the spreads unlike stocks/options that mostly have a minimum ticket charge that penalizes smaller accounts and rewards larger ones.
flemming
Junior member
- Messages
- 20
- Likes
- 0
Once you can generate a rate of return over a decent amount of time, then you can start to plan out how much capital you will need to generate a set amount of income. For example, if you can generate a 10% return on capital per month and you are trading with $1000, that means you will generate a whopping $100 per month. However, with a $50,000 account, you will generate a $5,000 income. Of course, this is a perfect scenario where you won't have a drawdown or a down month. I would add at least 4X the desired income as a loss reserve to get you through any lean months. So, in a nutshell with a 10% monthly return, you will probably need close to 70K in trading capital. Of course with a higher return you need less and with a smaller return you need more. If you don't have the capital, you will either have to build it up over years and years or go trade prop somewhere where they provide extra buying power (remember this always comes at a cost- profit sharing %'s and desk fees most of the time)
It all depends on your risk tolerance and how sharp your trading edge is and all that blah blah blah that's been said a billion times in topics like these. Now, personally, anything under 50k and I'd be scared money self-sabotaging even the best methods for making money in the markets. 100k is what I would consider optimal. Then again, I'm not the brightest crayon in the tool shed and people with a higher risk tolerance and better trading skills might make it with substantially less (though by the time they get to that level of skill they are probably much better capitalized anyway...)
As for Oanda, they allow you to determine the maximum amount of slippage you are willing to accept when placing orders. My experience with them has been good, slippage is very rare outside of news releases (and even then its relatively uncommon). The maximum order size is 20mil notional value.
As for Oanda, they allow you to determine the maximum amount of slippage you are willing to accept when placing orders. My experience with them has been good, slippage is very rare outside of news releases (and even then its relatively uncommon). The maximum order size is 20mil notional value.
LuKOs.ro
Member
- Messages
- 52
- Likes
- 2
I would be more conservative, especially if your just starting out your real money account. Use micro-lots and mini-lots and buy the smallest lot size for the highest possible margin (so that it leaves you more available margin). Put your stop loss short and don't double down.
Example: if you want to get some gold, buy one micro-lot 0.001 which at 500x margin will be 1.555 dolars in margin. For this kind of lot you should have at least 100 to 200 dollars, just to have some practice. Don't move up unless you feel comfortable trading it. If you have a losing streak stop and think if you did anything wrong (like risking to much or entering to early or to late or putting your stop loss to close).
Cheers!
Lucian
Example: if you want to get some gold, buy one micro-lot 0.001 which at 500x margin will be 1.555 dolars in margin. For this kind of lot you should have at least 100 to 200 dollars, just to have some practice. Don't move up unless you feel comfortable trading it. If you have a losing streak stop and think if you did anything wrong (like risking to much or entering to early or to late or putting your stop loss to close).
Cheers!
Lucian
chrisbliss
Active member
- Messages
- 160
- Likes
- 2
Thats not the point!
you need a trading system that works!
if you got the skills and a good system you can do it with just 50 bux.
but if you have 50000 and poor skills and a poor trading system
your 50000 will just be food for the sharks and gone in no time.
learn to trade first on demo then deposit 50 bux and grow it.
or you can deposit and loose it while learning
you need a trading system that works!
if you got the skills and a good system you can do it with just 50 bux.
but if you have 50000 and poor skills and a poor trading system
your 50000 will just be food for the sharks and gone in no time.
learn to trade first on demo then deposit 50 bux and grow it.
or you can deposit and loose it while learning
Do most brokers require a minimum amountto open an account based on what kind of trading you plan to do or is it completely different for all of them? While I am still figuring out what the heck I'm going to do, I was hopeful the the $1000 I had to devote to trading/investing right now would be a good starting point. At what amount did most of you start trading?
VielGeld
Experienced member
- Messages
- 1,422
- Likes
- 179
"How much" is really a relative concept to the instrument and your success rate. If your plan is to go Forex, and you have a 95% win rate, then all you need is $100 and 500x leverage. Lol.
But if going with stocks and a non-margin account, some would say $1,000 is the absolute minimum. $5k to $10k is preferable. If you plan to make a living trading stocks, don't shoot for anything less than $100k.
It's all really relative. The most important thing is your plan and whether you can stick to it. The money'll come after that.
But if going with stocks and a non-margin account, some would say $1,000 is the absolute minimum. $5k to $10k is preferable. If you plan to make a living trading stocks, don't shoot for anything less than $100k.
It's all really relative. The most important thing is your plan and whether you can stick to it. The money'll come after that.
chrisbliss
Active member
- Messages
- 160
- Likes
- 2
Yes it's different on all of them,
it has nothing to do with how you trade.
most retail brokers will let you trade with various amounts from 50 to 5000,
if a broker offering institutional trading priviliges you may need to deposit minimum 50000 or more..
but it's really not about how much you need,
instead ask your self how much you are willing to loose.
because you will most likely loose as a begining trader,
I blew 3 acounts in the past my self and I though I had the hang of it:whistling
I lost several tousands of dollars in my learning period,
and if I could go back in time and change anything, I would only deposit 50 bux,
it finally have turned around for me and Im actually profitable these days,
but the path to get there has been long and with a lot of pitfalls and brainwork,
I suggest you start with 50 bux and only trade microlots on a live acount,
and refill the acount as you see fit, see it as the price you pay to learn,
and get the proper education and save the rest of the money
until you are 100% sure you concistently can make money.
FXCM let you open with 50 and they are ok to trade with.
maybe Dukascopy EU 100 bux
stay clear of market makers
Last edited:
Shikamaroo
Well-known member
- Messages
- 305
- Likes
- 20
depends on your objectives. If u want to practice trading with live money $500 will do it. If u want to earn a living u need $10,000 or so and if you want to make a go at being a millionaire, u need $5,000,000 imho.
stevespray
Experienced member
- Messages
- 1,289
- Likes
- 156
It's easy to become a millionaire, just be a billionaire and get involved in forex trading...
thefinancialanalyst
Newbie
- Messages
- 9
- Likes
- 0
@stevespray - great quote!!
I have been asked this question (how much capital is needed to start) many times and most people want the minimum they can possibly get away with. In my opinion, it always come down to what stops you will be putting. If you are anticipating trades with a 100pip stop, it is highly unlikely that £500 will cut it, but if you are trading with 20pip stops at a pound a pip then you may be able to get started with £500-1000.
I have been asked this question (how much capital is needed to start) many times and most people want the minimum they can possibly get away with. In my opinion, it always come down to what stops you will be putting. If you are anticipating trades with a 100pip stop, it is highly unlikely that £500 will cut it, but if you are trading with 20pip stops at a pound a pip then you may be able to get started with £500-1000.
have a plan and stick to it. Lear how to take a loss. Believe me its psychological. Try trading a simple moving average crossover but always be in the market using short time frame eg 1 minute bars and a 5 and 20 moving average (simple). Its likely that you will lose, BUT it will give you discipline and then you can refine your trading strategy. You can make money, it will just take time.
It's all about risk control, you should choose a volume of capital that you can undertake the possible losses.
anyway, don't make it too small, someone only throw some pocket money like an amount under USD100, it's only for learning.
you should have an adequate amount of money so that you can implement certain trading strategy of your own.
anyway, don't make it too small, someone only throw some pocket money like an amount under USD100, it's only for learning.
you should have an adequate amount of money so that you can implement certain trading strategy of your own.
chrisbliss
Active member
- Messages
- 160
- Likes
- 2
it's not just about risk control,
this is a dificult buisiness and there is so many factors in play,
probability plays a very important part of trading,
stoplosses is good to control your risk in a way
but note that 200 pip sl has a much greater probability of not being executed than a 20 pip sl,
so lets say you "control your risk" to only 1 pip just for an example and to be extreme,
that sounds great doesn't it' you will only loose 1 pip maximum per trade,
so it isn't all about control risk, thats a myth because.
you will be stopped out 99 % of the time.
I realise a 1 pip sl is extreme but it's just to make a point.
therefore there must be a balance between the two,
thats the hard part
this is a dificult buisiness and there is so many factors in play,
probability plays a very important part of trading,
stoplosses is good to control your risk in a way
but note that 200 pip sl has a much greater probability of not being executed than a 20 pip sl,
so lets say you "control your risk" to only 1 pip just for an example and to be extreme,
that sounds great doesn't it' you will only loose 1 pip maximum per trade,
so it isn't all about control risk, thats a myth because.
you will be stopped out 99 % of the time.
I realise a 1 pip sl is extreme but it's just to make a point.
therefore there must be a balance between the two,
thats the hard part
chrisbliss
Active member
- Messages
- 160
- Likes
- 2
Thanks for your input, You got a point,
this is little of topic I guess but personally some thing I consider when set a SL
is probability, volatility, risk, risk reward ratio, ADR
and I try to find a balance between them ,
What is the probability your stop loss of 10 pips is going to be executed?
well, look at ATR, how volatile is the instrument?
and ADR, how much does the instrument generally move in a day?
I look at SR levels,
is your risk or SL expected to be well outside the above,
and if it is, are your risk reward ratio acceptable?
how much does it affect the probability of staying in the market
if you place your stop behind a SR level?
we can look at trend momentum average true strength, etc
risk is only the stop loss to the entry as I see it,
the amount of money you are risking witrhin the sl,
ofcourse you could minimize the risk by study all of the above and get the edge
what I mean to say in the previous is that it's more to it than just the risk or SL
so I guess you are right
this is little of topic I guess but personally some thing I consider when set a SL
is probability, volatility, risk, risk reward ratio, ADR
and I try to find a balance between them ,
What is the probability your stop loss of 10 pips is going to be executed?
well, look at ATR, how volatile is the instrument?
and ADR, how much does the instrument generally move in a day?
I look at SR levels,
is your risk or SL expected to be well outside the above,
and if it is, are your risk reward ratio acceptable?
how much does it affect the probability of staying in the market
if you place your stop behind a SR level?
we can look at trend momentum average true strength, etc
risk is only the stop loss to the entry as I see it,
the amount of money you are risking witrhin the sl,
ofcourse you could minimize the risk by study all of the above and get the edge
what I mean to say in the previous is that it's more to it than just the risk or SL
so I guess you are right
Similar threads
- Poll
