3. Margin Stop
The method is not recommended for novice traders.
It represents a quite interesting approach that would rather suit Forex traders, who like placing all money at once on a particular trade. But at first, a trader should divide his account into several equal parts to ensure that the whole capital will not be blown away in one shot. Supposing that a trader plans to trade $10 000 USD lots, it's suggested that an account opened with a broker "weights" in between $1000 to $2000 USD.
Then a "play" with a margin starts. Depending on the leverage that is going to be used and carefully choosing a lot size, a trader can calculate the point where a margin call will occur. This point will work as a global stop loss, which if crossed, will cause the account to be closed automatically.
A predetermined risk, no concerns about the manual stop loss, a maximum trading position size — all that creates the whole new approach to trading Forex.
The method is not recommended for novice traders.
It represents a quite interesting approach that would rather suit Forex traders, who like placing all money at once on a particular trade. But at first, a trader should divide his account into several equal parts to ensure that the whole capital will not be blown away in one shot. Supposing that a trader plans to trade $10 000 USD lots, it's suggested that an account opened with a broker "weights" in between $1000 to $2000 USD.
Then a "play" with a margin starts. Depending on the leverage that is going to be used and carefully choosing a lot size, a trader can calculate the point where a margin call will occur. This point will work as a global stop loss, which if crossed, will cause the account to be closed automatically.
A predetermined risk, no concerns about the manual stop loss, a maximum trading position size — all that creates the whole new approach to trading Forex.
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