Is there a limit to the contracts you can trade on Forex?

[anestelen]

I'm looking at trading FX, this is probably more a day trading question. is there a limit to the number of contracts you can trade.Now obviously Liquidity plays a part in this as in you cant expect to open a 1 trillion dollar position in a 3 trillion market and expect good positioning,but other then liquidity is there a limit, either recommended or compulsary.

 

[GammaJammer]

FX is, when you're talking about those kinds of sizes, basically an otc market, so the limit will be in terms of how much credit you have available (usually on a bilateral basis) with the other market counterparties.

But for you as a retail trader your size is, in market terms, infinitessimally small, so no, there are no regulatory type limites you need concern yourswelf with. I think the market will be able to cope with your size. Reccomended? I'd say just don't over leverage yourself. 10:1 max I'd say.

Hope that helps

GJ

 

[barryb]

I'm looking at trading FX, this is probably more a day trading question. is there a limit to the number of contracts you can trade.Now obviously Liquidity plays a part in this as in you cant expect to open a 1 trillion dollar position in a 3 trillion market and expect good positioning,but other then liquidity is there a limit, either recommended or compulsary.

Unless you are at the point where your size is already affecting markets you trade, i would say to you not to even bother thinking about this problem that 0.00000001% of traders will regularly experience. Try to get consistent before you take on the world.

 

[donaldduke]

Unless you are at the point where your size is already affecting markets you trade, i would say to you not to even bother thinking about this problem that 0.00000001% of traders will regularly experience. Try to get consistent before you take on the world.

Hmm depends on your strategy.

If you want to trade fast FX markets that are really moving and you looking to make a small number of pips, then you will be limited to the size of that is offered on the bid or ask at the point you want to jump in. In such a strategy you wont be able to work a larger order.

 

[barryb]

Fair point. If you're a scalper in the purest sense then size can be an issue. But these are good problems to have, however i doubt the OP needs to concern themselves with this too much at the moment.

 

[GammaJammer]

It's a bit like someone who's just taken up park football asking if the fame and pressure's likely to be a problem when they sign for United.