Not able to use the free margin

New comment
 
Hello community,

Can I ask your advice on why I am not able to use the free margin for a single trade? As the broker has set the limit to 1000 maximum volume yet they said they do not restrict the lot size. My available free margin is 80000. Why can't I use it to place it in a single trade? Please check the attachments. 
Files:
Free_margin.png  143 kb
Maximal_volume.png  140 kb
1001_shares.png  266 kb
1000_Shares.png  268 kb
 
Manoj Kumar: Can I ask your advice on why I am not able to use the free margin for a single trade? As the broker has set the limit to 1000 maximum volume yet they said they do not restrict the lot size. My available free margin is 80000. Why can't I use it to place it in a single trade? Please check the attachments. 

That is because trade volume and true risk is not based on free margin. Read the following from a post on another thread:

Forum on trading, automated trading systems and testing trading strategies

Loss Recover from losses trades

William Roeder, 2021.07.02 00:04

Control your risk so you don't have to recover.

Risk depends on your initial stop loss, lot size, and the value of the symbol. It does not depend on margin and leverage. No SL means you have infinite risk. Never risk more than a small percentage of your trading funds, certainly less than 2% per trade, 6% total.

  1. You place the stop where it needs to be — where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.

  2. AccountBalance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the spread, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)

  3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
              MODE_TICKVALUE is not reliable on non-fx instruments with many brokers - MQL4 programming forum 2017.10.10
              Is there an universal solution for Tick value? - Currency Pairs - General - MQL5 programming forum 2018.02.11
              Lot value calculation off by a factor of 100 - MQL5 programming forum 2019.07.19

  4. You must normalize lots properly and check against min and max.

  5. You must also check FreeMargin to avoid stop out

Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5 or 0.1 Lots maximum.


 
Fernando Carreiro:

That is because trade volume and true risk is not based on free margin. Read the following from a post on another thread:


Thanks for the reply, Fernando. But do you have a good idea how can I place 6 trades at a single price for my 1 minute scalping strategy? Basically I don't go for the home run but get my profits whenever possible by dragging the take profit line close to the trending bars. This way I don't lose much and get away with profits. Opening 6 trades and moving around with the take profit bar is challenging and often leads to confusion and losses which I encountered today. It was working well when I was using a single trade.

They had replied that

 "Please be advised that we do not have any restrictions on lot sizes or positions volume. Therefore, you can place any lot size you want as long as you have enough margin. Please consider the margin requirement depending on the price of the asset at the time of trading."

Isn't that an indication that I can use full margin of 100000.
 
Manoj Kumar: But do you have a good idea how can I place 6 trades at a single price for my 1 minute scalping strategy? Basically I don't go for the home run but get my profits whenever possible by dragging the take profit line close to the trending bars. This way I don't lose much and get away with profits. Opening 6 trades and moving around with the take profit bar is challenging and often leads to confusion and losses which I encountered today. It was working well when I was using a single trade.

They had replied that

 "Please be advised that we do not have any restrictions on lot sizes or positions volume. Therefore, you can place any lot size you want as long as you have enough margin. Please consider the margin requirement depending on the price of the asset at the time of trading."

Isn't that an indication that I can use full margin of 100000.

NO!

Obviously you did not take the time to follow-up and read all the links provided in the post.

If your trades moves against you, the "free margin" is quickly decreased based on the Volume (lots) you placed on the orders. That is why you have to calculate your Volume (lots) based on your Stop-Loss size and not on your margin.

You should first learn the basics of proper trading, managing risk, position sizing and money management. If you don't learn that first you will just blow up your account because of placing orders with so much volume.

 
Fernando Carreiro:

NO!

Obviously you did not take the time to follow-up and read all the links provided in the post.

If your trades moves against you, the "free margin" is quickly decreased based on the Volume (lots) you placed on the orders. That is why you have to calculate your Volume (lots) based on your Stop-Loss size and not on your margin.

You should first learn the basics of proper trading, managing risk, position sizing and money management. If you don't learn that first you will just blow up your account because of placing orders with so much volume.


The broker just said it was a mistake from their side. They have extended the limit to 10000. Now I can use the rest of the capital. Thanks!

 
Manoj Kumar: The broker just said it was a mistake from their side. They have extended the limit to 10000. Now I can use the rest of the capital. Thanks!
You are ignoring advice on how to properly account for risk. If you don't pay attention you will blow your account!
New comment
Reason: