IB Set Up

[Trembling Hand]

Not really sure what diff it would make. Do you go all in anyway??

 

[nizar]

Not really sure what diff it would make. Do you go all in anyway??

What do you mean do I go all in anyway?

Can I just have the simple answer please, can they do it or not?

It makes a huge difference. Trading on 2% is much more risky than trading on 20%. Isn't it?

I have never traded using margin or leverage before, so I definately don't want to start off at the deep end of 50:1.

 

[Trembling Hand]

What do you mean do I go all in anyway?

It makes a huge difference. Trading on 2% is much more risky than trading on 20%. Isn't it?

NO. you set your position size by the expected stop and your capital at risk per trade (2% 1% 0.5% whatever)

Margin has nothing to do with it.

What do you mean do I go all in anyway?

if you have $1000 capital and they give you 100:1 do you then trade $100,000 lots just because you can? No, you just trade based on % capital risked per trade. personally have never seen that on IB because there is no need to down size it. Just stick to normal position sizing ignore the MAX margin they give you.

 

[nizar]

if you have $1000 capital and they give you 100:1 do you then trade $100,000 lots just because you can? No, you just trade based on % capital risked per trade. personally have never seen that on IB because there is no need to down size it. Just stick to normal position sizing ignore the MAX margin they give you.

Thanks for your explanation though I still don't quite get it.

Yes I want to ignore the max margin they are giving me and use more of my own cash to fund the trades.

Don't worry I will send them an email and ask them direct once my account is set up and funded. For now, I have about 50million documents to send to them

 

[Trembling Hand]

Nizar its very simple. Just position size your trades as you would normally.

There is no need for you to worry about how much margin they "take" from your account. All your money risk management takes care of that.

If they "take" more margin per trade how is that going to effect your position size???? its not because you are working out your position size on % capital.

WHY do you want them to TAKE more margin? What is that going to do?

 

[IFocus]

^^^

Actually, I believe on the demo the data you can get is already pre-determined and lagging (I think).

I personally, only used it briefly (before signing up, this is where you pick your data Ifocus, you are talking about the paper trading simulator, wheras Jersey is talking about the actual demo) and only accessed US equity data.

Cheers

Ah didn't realize there was a demo


Nizar like TH has pointed out margin isn't the issue unless you intend on using margin to take more positions in the market.

Of course if your positions are correlated then this will not be effective risk management if using fixed fractional sizing for each position that effectively add up to one position.

I guess in forex there can be some strong correlation between the majors?

 

[nizar]

Nizar like TH has pointed out margin isn't the issue unless you intend on using margin to take more positions in the market.

Can somebody please explain how margin works if you intend on using margin to take on more positions?

Thanks.

 

[professor_frink]

Can somebody please explain how margin works if you intend on using margin to take on more positions?

Thanks.

you have 10K in capital. Lets say you get 3 signals for trades on the day that will require 20K cash based on using fixed fractional pos sizing. Your broker offers 2:1 margin, so you are able to take on all 3 positions without taking on extra risk for each position.

Simple

In forex, if you only want to use 20:1 margin, and your broker offers 50:1, then instead of taking on a 100K position just because you have 2K in the a/c, you will turn around and only purchase 100K for every 5K you have in the account.