Danger.. Why You Should Stop Trading FX - CHF Rate Decision
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Thread: Danger.. Why You Should Stop Trading FX - CHF Rate Decision

  1. #1
    **WARNING!!! MARGINE CALL CAN LEAVE YOU OWING THE BROKER BIG TIME**

    Does your broker honor margine calls through fast moving markets such as news releases or suprise bank conclusions which come out of nowhwere??? Otherwise your account is GONE.

    I realized that as a result of CHF rate conclusion on 09/06/11

    Let me explain...

    I've a live mini account which I just put in $10.00 at a time in order to experience feelings instead of trading a demo minus the luxery of feelings.

    I had a trade on the USDCHF with .01 lot size that equates to a little over 1 cent a pip and NO prevent loss, shame on me for not have been utilizing money management, BUT IT WOULD HAVE NOT HELPED. Neither could possess the brokers margine call of 100 percent

    Here is why!!!

    Price moved quickly over 700 pips GAPPING up many times. Because price was gapping up against me that the 100 percent margine call didn't close out my trade. I needed to manually close it at 61.5 percent margine leaving me owing the broker a bit over $1.30.

    If I would have had a $10,000 regular account and created that trade using a conservative two lots I would have blown the account and owed the broker 700 pips X 2 lots = $6,800. A STOP LOSS WOULD HAVE NOT HELPED!!!

    IBFX has a policy which says--

    Buy stop, Sell stop and (Stop loss) orders don't guarantee an order will be filled at a specific price.

    [All discontinue orders instruct the broker to close or open an order after a specified price is met or exceeded.]

    The given price is called the stop price. Once the stop price is met or exceeded, the order becomes a market order. Market orders instruct the broker to fill the order at the upcoming available price. The execution price of a buy stop, sell stop or stop loss can vary from the stop price.

    [This occurs most commonly during significant market moves or gaps.]

    **Often these price gaps are the result of economic news releases. Keep in mind that in a market losses may happen and orders may not be filled placed. ***

  2. #2
    If that is news to you, just be thankful you learnt this lesson whilst still trading a teeny tiny demo account!

  3. #3
    Everybody who deals FX signs a declaration stating that they know what they're doing and understand the risks. Nobody would signal that if they did know it could they? So what's the issue?

  4. #4
    That is money and risk management is so important.

  5. #5
    Can you place on a 1 standard lot commerce with an account ballance of $10,000?

    That fits to a currency management of 1 percent.

    Price spikes up 700 pips and ignores your 100 pip (money management) prevent loss.

    Guess what happens to your account?

    Gee, $3,000 left.

    Would you have signed a contract with your broker in the event that you knew a country was going to manipulate their currency in a supprise transfer and tear $7,000 out of your account???

    3 yrs of trading with over 4,000 trades rather than seen a movement similar to that one. Thus, You Never Know When Your Account Is Going To Be Wasted... Suprise.

  6. #6
    Quote Originally Posted by ;
    3 yrs of trading with over 4,000 trades rather than seen a move like that you. SO, You Never Know When Your Account Is Going To Be Wasted... Suprise.
    This Is the Reason Why I always trade using a Guaranteed Stop Loss!
    3 additional pips per transaction is well worth it for the reassurance.

    Just wondering whether this is the best % move in FX markets historically. Anyone know a one??

  7. #7
    Quote Originally Posted by ;
    Can you have signed a contract with your broker if you knew that a country was going to manipulate their currency in a supprise move and tear $7,000 in the account???
    If I know what I am doing, yes.

    Quote Originally Posted by ;
    3 yrs of trading with over 4,000 transactions rather than seen a movement such as that one. Thus, You Never Know When Your Account Will Be Wasted... Suprise.
    The market does not care. It is all fine, if you know what you are currently doing. Why this happened, have you any idea?

  8. #8
    Nothing in FX is guaranteed. In a rapid market when price gaps your stop loss and margine aren't safe. The margin call happens at less or 100 percent margin level. In case of a price gap, it closes at the first price after the gap as does stop losses.

    Absolutely nothing to do with knowing what you're doing.

  9. #9
    Actually that's why you should stop trading with leverage, not merely stop trading . However, as long as we can not afford this, we have to take that risk into consideration from the beginning.

  10. #10
    Quote Originally Posted by ;
    Nothing in FX is ensured. In a quick market when price gaps your stop loss and margine aren't safe. The margin call happens at less or 100 percent margin amount. In the event of a price gap, it closes at the first accessible price following the gap as will prevent losses.

    Absolutely nothing to do with knowing what you are doing.
    Not accurate, guaranteed stop reduction is exactly that, the broker charges a premium to guarantee that your trade will be closed at your predetermined price. I believe it's a practical tool price of trading as a business.

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