Thread: Account size

Originally Posted by ;

so d'ya guess that if I wuz to put $1 million in each of 2 distinct accounts, one with 50:1 leverage and the other with 100:1 and fix my lot size and prevent loss and these and risk 2% on a single transaction in every account, which account do not reckon I'd shed more on if'n I got stopped outside in both trades. I wuz wonderin.

If you're only risking 2% of your account, 50:1 leverage ought to be more than sufficient for you to exchange. I have had my primary account at Oanda now. Their leverage has always been 50:1 and it's never crossed my mind that I would need leverage. If you understand what you are doing, and understand how to control risk exposure correctly the 50:1 leverage is all you want. However , if instead of focusing on how best to exchange, you would rather shout all over the forum, on the CFTC murdered your profits by restricting you in how fast you can loose your money, then by all means do that.
I do agree that what they did is wrong, but only from the point of getting involved and imposing limitations where they should not have. The restricted leverage itself though, will not put any profitable trader out of business...

Originally Posted by ;

Ah, Slim Pickens returned.

Are you sure you can find a broker who will give you 100:1 on a million....

Yes'ir ole' Slim's a fairly shrewd ole' boy. Multi-millionaire and that stuff. The question equates to this grade school question that weighs more: a pound of feathers or a pound of lead?

But your answer is exactly what I thought I would receive; that the difference in leverage can also be a difference in the value of a pip.

I will assure that... it is not. Study a little, please.

Originally Posted by ;

Hello,

Nevertheless too often I hear people say that you want a significant account dimensions in order to become profitable, or put otherwise, it is a lot easier to make money with a thousand dollar account than with a million dollar account.

I'd like to ask anyone who ever put forward a statement like this to clarify himself, so we may have a discussion about the validity of this statement.

Thank you.

I believe the problem here's a plogical one, over anything. Not many people will exchange a $1000 account, and be pleased with a 3% monthly. So shoot for those% each month, and they attempt to push the limitations of what's possible and end up with discounted accounts. In case you've got a huge account, a yield, will probably be a lot more satisfying. Those tiny yields are going to be a lot more sustainable long term, and will enable the trader to take their time, and look for those ideal opportunities, while having the appropriate risk exposure. It is going to also allow the trader to have goals and these goals are usually a lot more attainable.

Size matters. Ask any female trader.

Originally Posted by ;

Size issues. Ask any female trader.

Best answer so far

Originally Posted by ;

yes'ir ole' Slim's a fairly shrewd ole' boy. Multi-millionaire and all that stuff that is petty. Really the question equates to the grade school question which weighs more: a pound of feathers or a pound of lead?

But your response is just what I believed I'd get; that the difference in leverage can also be a difference in the value of a pip.

I will assure that... it is not. Study a bit, please.

Spoken like a man who didn't read my whole post.

I asked a question. I asked if you're using maximum allowable leverage or equivalent position sizes. Without understanding that, I gave two situations --one illued with amounts which pertained to utilizing maximum allowable leverage.

In my summation I said if, on the flip side, lot sizes and prevent sizes were equal there would be no difference whatsoever, including the value of a pip. I didn't state that higher leverage has to equivalent higher pip value. But in order to answer your question I need to know if lot sizes and prevent sizes will be equivalent in either scenario.

Are you speaking about authentic leverage, or maximum allowable leverage?

Thanks for the contributions so far. As of now, we have identified a range of pros and cons of huge accounts:


accessibility to liquidity networks using tighter spreads.
Plogical: Bigger absolute returns decrease likelihood for all-or-nothing behavior.


--
-Liquidity might be too small for large trades - The prospect of affecting market prices. These outcomes are more significant for significantly less liquid goods (e.g. shares compared to Forex).
-Plogical: Bigger absolute drawdowns require stronger mental discipline.

Someone said that there's a prejudice in the sense that successful traders end up with huge accounts, and therefore you see a correlation between large accounts and profitability. That is definately correct. Nonetheless, in this discussion we look at scenarios that are first, and only should dismiss this causality.

Disregarding the advantages and disadvantages, yes, using large account sizes it's simpler to achieve equal absolute yields, but not comparative yields. I'm still looking forward to hearing from the folks that have consistently stated that large account sizes make it easier to become profitable. Or is it that they simply copied what they see, and did not consider the reasons that are possible?

Ps. Normally people discuss allowed leverage.

Originally Posted by ;

Nevertheless, I am still looking forward to hearing from the people who have consistently said that big account sizes make it much easier to become profitable.

Since there are a lot more ways of being profitable with a small risk when you attempt to reach 25% every year than when you attempt to double you account!!!

Having an account of 1 million, 25% every year means an excellent living.

Having an account of 10K, 100% means another 10K that's 25 times less than another man but with 16 times (!!!) More risk and not even.

That's it, that is all, to quote the best snowboard film ever.

Thank you, I thought about writing the same thing couldn't place it clear and so simple.

Originally Posted by ;

Because there are a lot more ways of becoming profitable using a small risk when you attempt to reach 25% annually than when you attempt to double you account!!!

Originally Posted by ;

Thank you, I had been considering writing the same thing just could not put it so simple and clear.

I'd be amazed if there was much of anything you could find out in your own but there just isn't, is that there Mr. Spitkok?

(tie your shoes, maybe)