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geldrausch

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geldrausch last won the day on August 19 2018

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About geldrausch

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  1. I will pass on a advise I was given, when I was starting: 1st You need time to learn. I know that sounds obvious, but in trading everybody expects direct results after starting to trade. That is a bit like buying the first tennis racket and hoping to play Wimbledon next year. 2nd You need a strategy that fits your style of live. Try to figure out how long you would like to sit in front of the trading desk. There is scalping on the 1 minute chart, there is swing trading on an end of day basis (which needs you to check charts and trades for 30 min a day) and everything between. A top 10 ATP clay court baseline specialist will lose most matches trying to perform serve and volley on hardcourt only. 3rd Combine the first 2 and add very defensive money management to learn. You said, you had a swing trade strategy lasting 2-3 days. Lets asume your average trade lasts 2 days and lets assume you would find 100 trades a year. Lets further say that for training purposes (remember, we are not here to win money but learn in the first year or two) you would risk only 0.5% of your starting bankroll per trade. That would mean 200 losing trades in a row would kill your starting bankroll (which should be a training size if you use real capital or a demo account). In the case of 100 trades per year that would mean, you are out of capital in the worst case after 2 years of training, and 200 losing trades in a row would prove the strategy is not really good as well ? These 2 years will teach you so many things about the strategy, the markets, the broker and the software you use that you only need a mentor to ask questions from time to time instead of the mentor telling you what to do. Problem is most people are ot willing to train for 2 years and so they pay a lot of money to the market while searching for short cuts that do not exist. Regards
  2. It is now only a few weeks till this will happen, could you maybe address the issue ? Does a guaranteed stop in that circumstances block the ESMA rule or is a guaranteed stop in this case useless as it will never be executed?
  3. There are a few points that in my opinion illustrate that all these decisions are done by people that have not used a CFD/Spreadbetting account themselves. 1st 500k to determine if someone is professional is a great measure, clearly someone with 450k has no clue about what he/she is doing 2nd Now an account cannot lose more than deposited. If those that wanted to not have any risk of losing more than deposited, they could have used garanteed stops. For the extreme risk taker that amounts to: Now your account is protected from losing more that you deposited, but you now are forced to lose 10x the amount than you ever wanted to risk, due to the fact that you now need 12k margin, where before you needed 1.2k. In case of a flashcrash worst case szenario you now lose the 12k not only the 1.2k. There are a lot of CFD companies out there that are small and in countries like Cyprus where legislation and supervision is not the standart it might be in th UK or Germany. Those companies force customers (which want to keep the same trading style and can afford it) do deposit huge amounts of money to their accounts. I hope that the ESMA makes sure that all those funds are protected if/when one of those companies goes belly up. Apart from that a 1200 Euro deposit turning into a 12000 Euro deposit due to increased margin might not be a problem by the amount of money itself, I would have prefered to keep the additional 10800 Euro in a long term stock market ETF earning money than at a CFD account where the only thing it does is giving a unpaid loan to the CFD broker. How that is protecting me as a customer, I have still not figured out. With the requested margin I guess a move to the futures markets directly makes more sense. But maybe IG figures something out.
  4. If I understand the email from today correctly, in some cases 100% margin of a trading position are needed. A lot of traders that I know that are using CFDs or spreadbetting use it for the trading aspect of their portfolio, while long term strategies like holding stocks are performed in other accounts. That is how I do it and that is why I mostly do not diversify trades on IG. Lets say I would like to trade Bitcoin via IG. Lets make a simple example: Bitcoin is at 10000 US$ I would like to trade 1 unit (Euro or BP...), that means that under the new ESMA rule I have to put down a 50% margin in that case equivalent of 5000 US$. Should that be my only position in the account, then the position would be automatically be closed at a loss of 50% of the account, which would occur at Bitcoin at 7500 US$ although the (guaranteed) stop is not reached and enough money is on the account. To really only be executed at a 50% stop, would mean to increase the balance of the account to 10000 US$ meaning that I trade effectively at a leverage of 1 instead of the maximum 2. That applies for any trader that is only holding a single position. Are there any plans of IG to counter that "problem" as in for example offering "virtual loans" Especially for cryptocurrencies I else do not see the point in using IG (or any CFD/spreadbetting company within Europe) compared to directly buying the coins if, in the end, a 100% margin is needed anyway. Any input or correcting my possibly wrong way of understanding the ESMA rules is appreciated. Best regards
  5. Hi, you really have to do something regarding the margin requirements for guaranteed stops. There is just no point in getting a margin call with a open position that has a guaranteed stop lets say at 1500 and although I am allowed to move the guaranteed stop up to 1600 that adjustment does not free any money regarding to the margin requirement at all. I completely understand that you try to adjust the leverage that a customer is taking but if I have lets say 3 positions where all 3 guaranteed stops are at the opening level, my risk is zero. Therefore I should be able to withdraw my initial deposit completely or use it to enter new positions. Locking some of that money for a margin that at a risk of zero is not existant is not right. What is worse in these situations that you never know, how much risk you are really taking as the margin is always higher than the real guaranteed (!!) risk. If you want to lower the leverage then increase the stop distance from 10% to lets say 25% or 50% but a guaranteed stop should never block more money than the guaranteed risk is stating. Best regards
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