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How much funding required on a trade


VIKING

Question

I am pretty new to this but wish to put my toe in the water so to speak. I have been using demo charts to get my strategy.

How much funding do I need to put into account so as not to be "taken out" in the event of a market surge? I obviously use stop loss and adjust according to market movement, and I intend to start off gently, one pound per point with a view to making five to ten points per trade and move forward from there.

Any advice gratefully received. Thank you.

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Hi @VIKING, it will depend on the markets you are looking to trade, size and how many trades you wish to hold at any one time. That's what the demo account is for, play around with different position sizes and markets and see how it affects the margin requirement. So you will have the amount of your account used for margin for the trades you have running and you will need an amount over the margin requirement for lee way to avoid any margin calls.

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At the moment I favour FTSE 100. Seems to suit me and does not regularly have massive moves which is beneficial to a beginner. Quite like Wall St but need to be keen to its larger movements.

Is £250 enough to get this rolling and build slowly? One trade at a time?

Cheers.

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OK. I appreciate your time on this. Just gone to FTSE demo to place 1pt trade and margin in box says £370. So... to place and maintain that trade in live account I would need in excess of £370. Presumably for £2 trade double that amount.

Good to get feed back from someone with experience.

 

Thanks again.

V.

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That is basically correct though there are some slight variations such as guaranteed stops for example. The most important figures are the position size and the market price and the % margin needed, (indices is different to FX for example), so Ftse being a lower  price than Dow the margin is a lot less. Play around on the demo and see.

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