I have colleagues using FX Solutions and they are very happy with them. Anybody know anything to the contrary?
Brilliant ! What leverage do they offer ? I am now confident that I can manage a leverage of 400:1. I used to trade with a leverage of 100, that sucked. Too boring, imo. I think, in the 21. century, anything under 400:1 is a waste of time.
So do we have any real opinions about Currenex. I am considering an account with OANDA but want to look at others still???
I keep hearing people say that it is more risky to use higher leverage. Let's see with 100:1 leverage at 10,000 lot size you risk 100 per lot. At 50:1 you risk 200 per lot. At 200:1 you risk 50 per lot. Which is better? Or if you trade $100 at 100:1 and make 50 PIPS you earn $50. At 50:1 you earn $25. At 200:1 you earn $100. Which is better? If your intent is to make money higher leverage seems to be better to me. I am in the process of finding out if any of the people who have made a LOT of money using high leverage and high risk have had any difficulties with their brokers. There are several people in this category in our local trading club from what I understand. Some people are trading with 20% of their accounts at 400:1 leverage. The trading strategy is highly disciplined and accurate so if it works the account grows very fast. I'm slightly less aggressive myself. So far I am not aware of any problems experienced with FX Solutions. I have not heard of anyone getting cut off or switched to phone in orders who have made real money but I intend to investigate further. The only downside I have found is that they only have 10 currency pairs. For most people that is not an issue but I like to look for position trades on all the pairs when the majors are stalling out or changing direction. MG FX is another one that offers this but they change the leverage if your account is more than 10,000.
I am not aware that Currenex is available for individual traders to trade with directly. You can trade Currenex through one of their partners such as GFT. GFT has an excellent platform and charts. They are one of the only brokers that I might consider cancelling my subscription for professional 3rd party charts with. Then again, I would rather have a good trading relationship than free charts. However, I have discovered that they absolutely refuse to publish their interest rates in any way. Good brokers should have the rates in the trading platform quotes window. This is a serious red flag to me that I have questioned them about and they have not come up with a legitimate answer. Each broker has completely different interest rates apparently due to the lack of regulation in the industry. And each one has different policies on how or if they pay or charge interest. Since brokers make their bread and butter from day traders who don't care about interest but enjoy giving their accounts away, this has not yet become a serious enough issue for companies like GFT and FXCM to address. FXCM is in the business of charging the negative interest regardless of which direction you are trading unless you are using a 50:1 account. Thankfully free enterprise works through competition and hopefully more people will choose not to trade with deceptive brokers. One would think that 3-5 PIPS on all trades would be incentive enough for someone to create a good forex trading company. But they seem to need to find other ways to steal, manipulate, deceive, etc. FX Solutions pays full interest on a $300 account at 400:1 leverage.
The most important aspect of making money is managing your risk, ensuring you don't blow out, not maximizing profits. We aren't playing no-limit holdem and planning on blowing out in a few hands by going all-in with 85o. Typically when an account is reduced to 50% of the initial margin requirement, a margin call ensuses and positions are liquidated. For EUR/USD the following apply: Trading at 400:1 leverage a 12.5 pip adverse move will trigger a margin call. Trading at 200:1 leverage a 25 pip adverse move will trigger a margin call. Trading at 100:1 leverage a 50 pip adverse move will trigger a margin call. Trading at 50:1 leverage a 100 pip adverse move will trigger a margin call. Trading at 10:1 leverage a 500 pip adverse move will trigger a margin call. If you trade over 50:1 leverage you are very likely to lose half your account on a single trade that just keeps on going. Last time I checked, the average daily range of the EUR/USD is over 100 pips. If you are planning on trading at 200:1 leverage and your stop loss is greater than 25 pips then you will seriously impair your account before your stop has even been hit. It is no wonder so many bucket shops offer high leverage. It feeds the gambler's mentality of going for the big score with a limited amount of money. The odds of succeeding at such lofty levels of leverage are negligable. Spot dealers are in business to make money.
That is only true if you trade with your entire account at once. If you choose to risk 2% of your account and that amount happens to be $2000, trading at 200:1 or 400;1 will give you a higher return than 100:1 with LESS risk. It would not be possible to have a margin call doing this. There is a cuttoff point where the percentage of your account that is at risk vs the # of PIPS that could go negative in a trade could cause a margin call. The objective is to plan to not use that percentage of risk.
I have multiple position trades running some of which have gone 200 PIPS negative and have never come anywhere close to a margin call with 200:1. It is the gamblers mentality that would consider risking more of the account at once to trigger a margin call. It is the business mentality that understands the benefits of high leverage.
The point is that trading the full account at full 200:1 leverage will dramatically increase your risk of ruin. If you are trading 2% of your account at 200:1 leverage then in reality you are trading your account at 4:1 leverage (not a particularly high level), not 200:1 leverage. Using that assumed leverage for a stop out level doesn't reduce your risk on that specific position. Using closer stops actually increases your risk of loss on a given position, and almost always decreases your expected return for a given method. You can test that for yourself (I have). Risk and reward are directly related. Do some reading on the subject - I suggest any of the books by Ralph Vince on money management. When you risk more than optimal f amount of capital your returns exponentially decrease, even on a system with a positive expectation.