Is there a way to tell what my max possible loss could be ahead of a large event? Neither Oanda or FXCM would comment on the max ceiling for possible loss(!). They would not cap it at a certain percentage above 100% of account size - or cite historical averages after the USD/CHF panic event. I was hoping they could cap it at a certain percentage (like 200%), but they would not.
The situation:
*$10,000 account.
*$5,000 max margin used of the 10,000.
*I am long/short in 9 pairs near 100% of the time - I split the 5,000 pretty equally among the 9 - and pretty even long/short split.
*The leverage max is technically 50:1, but trade explorer shows it as using 25:1.
*I would attempt to have $10,000 in a side account in bonds or something as "reserve" for if I saw a greater than 100% (10,000) loss.
My questions:
1.) Is there a percentage this can be capped at? Is 200% safe- with the 100% reserve?
2.) Would trading through an LLC or corporation be able to help? - IE cannot lose more than what was put in to the corporation? Oanda claimed that they have an "Entity account" you can do this with and that you can still lose more than 100% with this account.
3.) Since I split among 9 paris, would I be somewhat safe from this? - this means I would probably only have about 600 of the 5,000 (1/9 * 5000) used in a "problem pair", at any given time, but I could be mistaken.
Does anyone have advice or stories that they can share? Do you just need to approach this with an LLC account and lawyer(s)? Thanks in advance for all of your help! - also, feel free to share any war stories about past events similar to this if you would like.
-Mike
The situation:
*$10,000 account.
*$5,000 max margin used of the 10,000.
*I am long/short in 9 pairs near 100% of the time - I split the 5,000 pretty equally among the 9 - and pretty even long/short split.
*The leverage max is technically 50:1, but trade explorer shows it as using 25:1.
*I would attempt to have $10,000 in a side account in bonds or something as "reserve" for if I saw a greater than 100% (10,000) loss.
My questions:
1.) Is there a percentage this can be capped at? Is 200% safe- with the 100% reserve?
2.) Would trading through an LLC or corporation be able to help? - IE cannot lose more than what was put in to the corporation? Oanda claimed that they have an "Entity account" you can do this with and that you can still lose more than 100% with this account.
3.) Since I split among 9 paris, would I be somewhat safe from this? - this means I would probably only have about 600 of the 5,000 (1/9 * 5000) used in a "problem pair", at any given time, but I could be mistaken.
Does anyone have advice or stories that they can share? Do you just need to approach this with an LLC account and lawyer(s)? Thanks in advance for all of your help! - also, feel free to share any war stories about past events similar to this if you would like.
-Mike
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