If you don't have at least $10k you'll likely lose money on Forex?

Discussion in 'Forex' started by crgarcia, Feb 5, 2008.

  1. Standard lots are usually $100k

    With 10k invested in Forex, you have a 10:1 net leverage.
    Preferably $20k, so leverage goes down to a manageable 5:1.

    Those trading at 50:1, 100:1, 200:1, etc are very likely to lose their money; because, even if they correctly forecasted market direction, they can't let it fluctuate much.

    So, less than 10k equals a loser?
  2. I'm not following your premise. Are you saying that if you have less than 10k, you will automatically "lose" on most of your trades and therefore blow up your account? No offense, but that doesn't make sense.
  3. Not automatically.

    But with more than 10:1 leverage, it's much more likely to have severe losses, even if you don't blow up your entire account.
  4. One of the nice things about spot fx is that you can tinker around with small accounts and still not overleverage yourself. Mini and even micro accounts are available that allow you to trade 10,000 units and less. So I would disagree with the statement that you need at least 10k....
  5. On average so does >10K

  6. Leverage has nothing to do with it.

    Its stop size x contract size = amount risked per trade.

    amount risked / account equity = risk per trade.

    For example.

    50 pip stop x 1 mini (1$ per pip) = 50$ risked per trade.

    50$ / 10,000$ = 0.5% risked per trade.

    The assumption that each trader leverages their entire account on each trade - at max gearing available - is false.

    This is more the realm of ignorant newbs, who, unfortunately do not understand the concept of leverage and risk management.

    Nothing intrinsically wrong with high leverage at all.
  7. Oanda lets you trade in lots of 1 unit. I.E. Buy/sell 1 euro. So you can trade with a $10 account and and use less then 100% of your equity on a trade.
  8. ssss


    1. Average retail account life expectancy 45-60 days

    2. Approx 95-98% from retail would loose through
    years .

    With 100 $ or 100000$