So, like many others, I've been on the hunt for a "good" broker.
I have been looking for a broker in the Forex or Futures market that is willing to help me accomplish sane money management.
All talk a big game about how you can always set your orders, or call the phone number if you need to close out. Lots of lip service, but no real intent to help you protect your equity in a real way when the market has been unkind to you.
The reality in the US is that for forex day traders, you will be forced to use 50:1 leverage whether you want to or not and for futures day traders, you are forced to use up to 500:1!!! Please, do not argue that leverage is based on position size. It absolutely is not!!!
None of the brokers I have spoken to(all of the majors as far as I can tell) will margin call you at any margin level below 100%. They all say you can just take smaller positions sizes and set stops, but this does not really protect equity in any way in "adverse market conditions".
Here is an example that I worked through this morning with ATC Brokers. At ATC Brokers, the minimum account for forex is $5K. Say I open a 5K account and only want to risk 1% of my capital, so let's say I take a position of 10 mini lots of GBP/USD. This will require@ 1800 of margin. on a $5000 account, there is $3200 left to be eaten before margin call. Say I sell at 1.5555 and have a stop limit at 1.5560. If the market gaps up to 1.55601 and keeps going, my position is open until somebody closes it. Whether by margin call, platform execution or me calling the trade desk. Not a problem if price stalls out just over my limit or retraces, but what if it keeps climbing 5-10 pips every minute for a couple hours and I am not able to manage it myself(rare instance for sure, but totally possible)?
Why do none of the brokers have any mechanism for closing out when account margin has exceeded any threshold less than 100%
WTF? How can this be right? There is no rational, cogent argument I can come up with to support this policy except unfettered greed and avarice. Can someone on the "other side" perhaps enlighten me why I'm lost on this?
If there are regulations forcing us to use 50:1 and 500:1 leverage, why can't there be one that mandates that brokers have some way of trying to help their clients(the ones that want it at least) when shit gets crazy.
Really disgusted and dismayed... That being said, I am an experienced and profitable trader and this knowledge will not leave me crying on my mommy's shoulder, but wow, what a bummer.
P.S. Another thing I found out is that if you are looking into doing cme currency futures(mini contracts, not full size) instead of spot forex, forget it, the liquidity is absolutely dismal(for day traders).
The first way to protect yourself is to trade a very liquid market where gaps are less likely or at least muted. Only trade when market is most liquid not holding positions over night. Personally if I do anything overnight I use zero leverage. Never have a position on that you are not monitoring. Be smart about using leverage.
Know how an exchange handles a gap past your stop. If the stuff I trade gaps over my stop it will immediately turn into a market order and fill. In a liquid market seldom happens and if does not much slippage.
I don't think it should be brokers responsibility when there are plenty of ways to protect your capital.
Have a sound plan that keeps you away from a broker ever having to liquidate your account. If you are wanting broker to protect and liquidate you to keep from getting a call your plan is a bad one. Setup a plan and trade in a way that never allows you to get close to that scenario.
Just thinking out loud in the above not preaching at you. I personally hate forex feels like the wild west. It seems almost rigged to me. Better places to trade imo.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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I love to argue, and I actually do think that leverage is based on position size.
Why would you use a stop limit order? You do not have to run that risk, asyou can also use a stop market order. It is true that stop market orders only give you protection in liquid markets. That means that you need to look for a liquid ECN, a suitable broker and thne trade a liquid pair. After all you are only a speculator trying to steal the money of somebody else.
Nobody forces you to use more leverage than you can afford. Nobody forces you to use stop limit orders either. The broker is not responsible for what you are doing. However, I would not trust any broker who is running an own trade desk with traders taking advantage of knowing their client's positions.
The mini contracts are indeed illiquid. They are illiquid, because commissions are too expensive . But even with a small account of 30k it is no problem no trade the regular contracts.
It is true that I sometimes like to take the role of the devil's advocate, but this is because that I think we should be honest to ourselves
Forex is a huge gambling industry and it is not the average trader who profits the most. And as always, when it comes to gambling the dice are loaded.
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I don't know about you liquidcci, but I don't get to decide when or how the markets do what they do, perhaps you do? A liquid market can turn into an illiquid one and vice versa in microseconds...
That's nice to hear that your broker/exchange offers that, sounds pretty safe. NONE of the brokers I've talked to or platforms I've used work like this. Also, the word SELDOM doesn't seem to carry the same weight for you as it does me. All it takes is ONCE and you are down 10-20+% instead of your specified 2%
I don't think it is their "responsibility" either. They are a financial services company that specializes in executing trades for their clients because they pay them to do so. I need the service of closing my positions if I accrue too much drawdown in rare, emergency cases. Is this too high a concept to grasp?
There are many ways to protect your capital as long as you are in front of a screen, in reasonable health and have access to a phone. Life happens and there are times when this is not possible. Why is it so unthinkable for someone to want protection in situations where they are fallible? I'm not a cowboy, I don't have any bullshit pride telling me "I have to be a REAL MAN to manage my trades..."
We hire brokers to perform every single other function we need them to. I can think of no greater one than protecting me from financial ruin when something has gone wrong and I cannot. If they are not willing to do that, I move on.
This sounds like a script for a nice after-school special liquidcci. Unfortunately, you miss the point. What I am saying is that I want a point where the broker says "hey, this guy isn't managing his trade, we'll get him out so he doesn't REALLY lose more than he wants (and we can continue to make commissions off his volume)." if I have asked them to do that for me. Why is that such a terrible and inconceivable solution???
Luckily, I have found ONE broker that was willing to fulfill my request and reduce leverage to 10:1 and margin call when my drawdown exceeds 2% of equity. I am comfortable that this offers me adequate protection from the market that I trade.
Your problem is due to the fact that you are trading FX, there are no such problems with reputable futures brokers. You can easily have them set a percent limit on depreciation of account value.
Well Fat Tails, regardless of your legendary status here, you are wrong and your argument(or lack of) is ignorant. This is why... When you open 1 mini contract of M6B for day trading, you have only used up $20 of available leverage because futures day trading margins are 500:1. So, on a 10K account there is $9880 of equity to be eaten until margin call-when shit goes crazy, not talking about 99% of "normal" liquid market. If the position was leveraged at 10:1 price would have to move orders of magnitude further against you to see the same level of drawdown. At rollover, you will only use another $180 of margin to maintain the position, so $9800 to be lost on swing trade strategy(which I do not do)
I suppose you don't realize how redundant and ignorant this statement is.
That was a snide, uncalled for, libelous remark Fat Tails. You might be, but I am not. I am a businessman looking to grow my business and work with people that want me to be successful and vice versa.
You need to replace the word "Forex" with "Life" in that sentence and then you might understand further where I am coming from.
You may wish to alter some of the language in this post, It's not proper to insult other members here.....Mike will admonish you if you don't, just letting you know.
This statement is ignorant of the realities of the market. There is no hard stop in any market. Price can go wherever it wants as fast or slow as it wants. If you don't understand that, you have bigger problems than me...
Sounds like exactly what I am looking for. Would you mind mentioning the name of a "reputable, reasonably priced" futures broker that offers this?
I suppose I don't have enough capital, yet, to have an account with one of those brokers, because none of the 4-5 futures brokers that I have talked to recently(that were supposed to be reputable) do that.
The problem is that for each of the brokers I spoke to, 100% margin use(MB Trading lets it go to 120%) was the only point that they would have any interaction with my account. When it is in deep drawdown and the market has a larger percentage of my money than I would like it to have. None of them were willing to change this policy. These are "major name" futures brokers. Deep Discount Trading was the only one that will take you out when equity reaches $1000, but if it was $10K that's no favor to me...
I'm (usually) a compassionate guy, and I feel sorry for your loss. However, you would be wise to rethink your strategy before this gets out of hand.
You come on here bitching and speaking in absolutes about things which you clearly don't know much about. You've set your "Trading Experience" to "Master", but yet you're trading micro lots?
I think he was just joking around (sarcastic emoticon), not looking to stick my nose in here really, I know it's easy to misread intent on posts sometimes....I suspect if you look back you'll may intrerpret it differently
Now I'm convinced that you are a troll. Please look up the definition of hard stop before making any further comments. I'd be offended by your attack if you weren't making such a fool out of yourself.
Well, it can be done. I'd prefer not to share my brokerage with you, so I guess you'll have to do further research on your own. A simple stop will remedy most of your worries, so it doesn't really matter anyway.
There is no loss Lornz, don't feel sorry for me. I protect myself. The lot size I am trading (and capital I have available for this) while I am testing out brokers and has nothing to with capital I have available or my trading experience *in the market that I normally trade*
What exactly is my strategy, Lornz? Every single statement I made is 100% true. Please prove otherwise with fact or apologize for your ignorance and assault Lornz.
You may fancy yourself compassionate, but you present as arrogant and condescending. You initiated your correspondence with me with an assault on my character. How is your strategy? Guess how much weight I give your response...
I'm not the one that initiated attack on another unprovoked.
Now I understand why no "real" traders come to these boards. And if you lot are "real" traders, I'll see ya on the flip side.
I have the cognitive power to tell that he was not really calling me a thief. Suggesting I have the mind/operations of a thief in a public forum whether with a smiley face or not is still libelous and way of topic when I am sincerely trying to get to the bottom of something that I feel needs to be talked about.
I have been honestly, sincerely, REALLY looking for a broker that will help me limit my absolute downside risk (when I cannot) and I have not found much there. I suppose the frustration is apparent in my words, but if people see it as bitching and whining, then they need to hit the next button, or leave a constructive, reasonable comment, not a thinly veiled attack that is supposed to make them sound/feel superior.
I don't blame anyone for anything, I do take responsibility. That is precisely what I am doing. I am trying to assure that I will receive the least amount of drawdown in adverse conditions or times when I cannot manage the trade. Why is everybody reading my comments like some whining baby?
I just want the ability to pay a broker to cover my back at whatever point I want and in my research of the past few days, they are not crawling out of the woodwork...
You might want to take a look in the mirror, partner. Posters on this board usually have a friendly tone, but every once in a while we get guys like you. Maybe if you would refrain from attacking esteemed posters using vulgar language, I would be more inclined to treat you with respect.
A simple stop will solve your problems. You're creating problems that don't exist.
If you have your broker set your max loss to 60% of your account, there still has to be a market there. The broker will just initiate a market order when that amount is reached...
Alas, I'm just a pathetic poseur... Hopefully I'll become a "real" trader like you someday!
Thank you kbit. I have looked at Tradestation and it is not for me.
I use Multicharts and will be writing my own FIX based iPad app to trade with.
My research has led me to a broker that I feel comfortable opening an account with(that will assist with my risk management needs) so I suppose the saga ends here.
Well, partner, with all due respect, your esteemed colleague attacked my character with libel and called the statements that I made false. Guys like me only get like this, when guys like you think they are big chit. You are not as great as you think you are Lornz and you know absolutely nothing about me.
If you don't realize the folly of this statement, then I hope you never do.
You are still missing the point. The entire point of my post was that *in my (perhaps limited) research, I had not found a broker who was willing to do this at any point other than 100% margin usage.* It is EXTREMELY unwise to leverage in a 500:1 when there is no protection like that, because if something goes haywire and the position continues to move against you, nothing will happen until you are bust.
I don't want to trade with a broker that has that policy, do you?
Lornz, I couldn't agree with you more, partner. Perhaps someday you'll become as good a poseur as you are a trader. I know it's hard, but you're trying and that's all that counts. :-)
Those who are interested will know where it applies on this thread.
It is off topic with regard to leverage for sure. However it is rare we get to see such a stunning example, I thought it would be interesting to point out.
Carry on being a "master" trader and dispensing your knowledge to the rest of the "non real traders", who have tried to help you.
You're right, I was being disrespectful. However, I would be tempted to claim the same about you. You start off by proclaiming erroneous assumptions as facts, and then you attack the posters who try to help you correct your faulty views. If you'd only asked nice, I am sure many would try to help you in a respectful manner.
As @Fat Tails said, we are all just trying to steal each other's money. It is the nature of a zero-sum game...
I honestly don't know how to respond to that, we are apparently living in different universes.
If you're leveraging 500:1, you are going to go bust either way. It is extremely unwise to use that kind of leverage regardless of stops. If you are a businessman, you would be wise to avoid bucket shops.
My point was that, unless you have too many/complex positions to monitor, a stop will to the trick. In fact, in many instances, the two are equal. If the account's value drops by the set amount (40%, e.g.) the broker liquidates your position using a market order. For a single position (as you used in your example), that would be the equivalent of you placing a stop market order at the same price. I don't know how I can make it any clearer than that.
If I ever become as good a poseur as I am trader, then - lord, help us all - I will be unstoppable!
I suppose you'll carry on rummaging around these boards insulting and doing no good for anybody. Bravo!
Who has tried to help me? only kbit and cw30000. The others, including yourself Twiddle, only attacked. How are these people helping me by ignoring (or not fully reading) what I said and then flying off and attacking me about something that is not cogent to the point I was making?
Just to be crystal clear, I have never professed any trading proficiency, or made any statements about my level of profitability(except for a few journal posts here on futures.io (formerly BMT))on the internet or IRL(except to my wife and partners.) I don't do that. It doesn't matter, that was not what the post was about and the fact that you brought it up tells me you have jealousy issues or just can't control your malicious tendencies one of the two.
You may be here to try and become a better trader, I am not. Not that I am not trying to improve my style(or that it can't be improved), but I don't get anything related to that from here. I don't give two squats if anyone around here thinks I am the ultimate trader or that I blow up accounts daily. Reality is the only truth and it will never live on this forum.
If you can't understand that my post had absolutely nothing to do with my ability(or lack of) as a trader, then you may want to take a refresher course on how to read american english. The post said nothing about bad trade decisions, it was 100% about managing risk when "events" occur and systems/humans do not perform as they normally do.
Is there anyone who read what I wrote and understood that what I was talking about is risk management and not bitching and whining about "bad brokers?" Should I change the thread title to "My search for a risk management futures/forex broker?"
I'm growing tired of this... Perhaps I'll stop beating this horse now.
What happens when an unstoppable object meets irresistible force? You might be humbled.
I'm out. Good trades to all and hopefully there are some intelligent people out there that will get what I said and understand it. If not, oh well, I tried.
Once again, since you missed it the first time. I did not insult you. Recognising a behaviour someone is displaying is not insulting them.
Fat tails did not insult you. As Lornz remarked aboved, "stealing from each others accounts" is pretty much how this game is known to many of the players. He was not calling you a theif. He also helped you with advice about market orders. Lornz has tried to help you also, and it was you who attacked everyone stating no "real traders" post here, indicating those who say they trade are liars.
You set your trading level to the highest possible. Master.
This is quite a comical statement.
The fact I brought it up tells you nothing other than possibly I am interested in human behaviour.
Well, you are a master after all...
And yet you say things to one of the most respected traders on this forum like:
"If you don't realize the folly of this statement, then I hope you never do." When he is discussing a simple concept he is completely correct about.
That very much implies you think your knowledge of trading is greater than his. And lets not forget, once again, you set your trading level to "master".
Probably a wise move.
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Protecting my capital from the market is nothing to need to "have a sense of humor" about. I suppose you don't come up all smiles when someone attacks and belittles you (by making snide comments about thievery), calls you a blowhard-know-nothing trader and have a paralyzing mental disease that distorts your reality? I don't think so. Especially when all of them missed the point of the post 100%
Good trades and Happy Holidays to you too Lornz...
I understand that my post might have come across as sarcastic, but I was actually being sincere. I might kid around a lot and be prone to polemics, but I did try to end this discourse on a friendly note.
No one was "making snide comments about thievery", you are clearly reading malicious intent into a comment clearly not intended that way.
I am open to the possibility of being an idiot, but your original post is based on a faulty premise.
I don't have the answer to post #1 and I understand your point since i have been thinking about it myself. Have you tried bypassing the problem of brokers by creating a strategy that controls your money management, you could for example flatten all positions if you are risking more than 2% of your actual capital. I have to admit that in my trading career I moved my stopped in a non convinient way and sometimes or better, many times my computer is sticking to the rules much much better than me or any broker backoffice.
I am simple minded, in my opinion a hard stop does both allow me to control leverage and protect me from a huge loss. I am aware that there is an operational risk, which is out of control. If the electronic market, where I trade is down, nobody can protect my funds, even not the broker.
I did not want to insult you, but just call the game what it is. FOREX retail is a business, if you are on the sell side - that is selling broker services to gamblers. This is very similar to running a casino. The FOREX brokers either have an edge as the casino does, this is the case where you trade against them. Or at best they are simple service providers, who supply access to a regulated market place or ECN.
I have only been to a casino a few times in my life. I know that the house has an edge due to the setup of the games. So unless I use some super-sophisticated devices to outsmart the house, I will probably lose my shirt. Also I do not call it a "business trip", if I go to the casino.
The FOREX retail market is a gambling market. Some speculators pretend that they supply liquidity to the market place and thus contribute to the common wealth, as they are facilitating the transactions of hedgers, who need liquid markets to protect themselves from market risk. This argument was true for local floor traders who traded the other side of the order book to compensate for temporary imbalances between supply and demand. But is this really true for FOREX retail traders?
I agree that life is somewhat similar to trading. The trading universe is similar to a small universe with different species of traders and algorithms. Traders and trading algorithms feed on each other, as carnivores feed on herbivores. These similarities and the hidden forces of feedback is something that attracts me to trading.
But if trading can be seen as a metapher for life, it is by no means life itself. Its physical component is reduced to staring at a screen and pressing the button of a mouse, the metabolism is reduced to emotions.
Trading is neither business nor a surrogate for life, it is mostly gambling. I feel sorry for your loss. But as a master trader you will have to accept responsibility and not blame others.
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Moderator Notice
This thread has been closed.
The original poster has received a 60 day ban for rude behavior. It was sixty days and not permanent because he did edit out some of the rudest remarks, and this appears to be his first offense.
But nonetheless, everyone knows we do not tolerate such uncalled for behavior on futures.io (formerly BMT).
If you wish to continue this discussion, a new thread without the name calling and rude behavior can be started.
