Don't want to give all my money to the broker

[Gabrial]

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.

 

[0007]

Only ever keep enough with your broker for trading - no more, no less. It's already risky enough using a bank.

 

[Martinghoul]

Some broker deposits are covered by the depositor protection schemes (e.g. FSCS or FDIC deposit insurance), just like bank accounts are.

 

[Pazienza]

Some broker deposits are covered by the depositor protection schemes (e.g. FSCS or FDIC deposit insurance), just like bank accounts are.

You need to check this out carefully though. I tend to agree with the idea of keeping a minimal balance.

That said, if you were really worried and just needed to spread money around, parking 85 balloons in a broker's account would give you another dollop of FSCS protection.

 

[Martinghoul]

You need to check this out carefully though. I tend to agree with the idea of keeping a minimal balance.

That said, if you were really worried and just needed to spread money around, parking 85 balloons in a broker's account would give you another dollop of FSCS protection.

Yes, you def need to check it carefully... I always ask for written confirmation from the broker and the details of their FSA registration.

 

[Gabrial]

Thank you for your suggestions. Predict - unpredictable.

 

[Joseff]

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.

That's a good idea. Give you good instance. I have been playing poker on Full Tilt, now they are in trouble with licenses, and I can't access my funds. It's only couple hundreds so nothing to worry about, but the main point. You don't know where to go and where complain.

 

[CortneyWilliams]

It's a risk to trade in Forex, and it would make it dangerously riskier if you leave all your account to someone who might be the cause of a massive loss. So, it's a great idea to leave 15% with your broker.

 

[St.Sarah]

I prefer to separate my money between different brokers, if i will lose money from one broker i will have some in other broker.

Agree with 0007 - no more, no less !