Micro, Mini and Standard Accounts?

[hendrix]

Hi!

In financial literature it is widely suggested, that "...you have at least $100,000 of trading capital before opening a “standard account”, $10,000 for a “mini account”, or $1,000 for a “micro account”.

I wonder if this also applies to "real life" situations? I've read somewhere that one should have at least $30.000 before changing from micro to mini account.

What is the best possible way to determine the threshold, when should one up his game and change his accounts?

My soon to be broker (EFX Group) has a fixed lot size: 1 lot = 10.000 units. If I'd like to emulate a micro account, all I would need to do is buy 0,1 lots for 1000 units, 1 lot for 10.000 units (mini account) and 10 lots for 100.000 units (standard account)?

I'd be very thankful for your help with this!

 

[oilfxpro]

Hi!

In financial literature it is widely suggested, that "...you have at least $100,000 of trading capital before opening a “standard account”, $10,000 for a “mini account”, or $1,000 for a “micro account”.

I wonder if this also applies to "real life" situations? I've read somewhere that one should have at least $30.000 before changing from micro to mini account.

What is the best possible way to determine the threshold, when should one up his game and change his accounts?

My soon to be broker (EFX Group) has a fixed lot size: 1 lot = 10.000 units. If I'd like to emulate a micro account, all I would need to do is buy 0,1 lots for 1000 units, 1 lot for 10.000 units (mini account) and 10 lots for 100.000 units (standard account)?

I'd be very thankful for your help with this!

One must never expose his account to loss of more than 20% in total and in the worst case scenario

Money Management | TurtleTrader

money management and position sizing - Google Search

 

[taildragger]

One must never expose his account to loss of more than 20% in total and in the worst case scenario

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I never expose higher than 5% in any worst case (taking in account that I am complete newbie)

 

[nine]

I would be more cautious.

Although it is possible to calculate the ideal amounts to risk based on knowledge of a historical series of trades I'd recommend some basic rules.

1. Risk no more than 2% of your account size per trade if trading end of day (risk is the dollar amount lost from your entry point to your stop allowing for both slippage and commissions)

2. Halve that risk if day trading because the chance of repeated error driven failure is higher.

3. On all your positions don't risk more than 15% of your account equity EVEN IF you believe they are not correlated (less if correlated like long stock positions).

You can reverse engineer that to decide how big your account needs to be. These number should probably be halved again for a brand new trader unless you really don't care about wiping out the account.

 

[hendrix]

Thanks for your help, guys!