Most of the time my forex accounts operate with minimal interference from me. I get on with my day and the accounts busily work away in the background 24 hours a day, five days a week.
But that does not mean I don't get involved with them at all. It’s important that you keep an eye on the accounts and see how they are doing and be able to make decisions about them, if you have too. I will share with you how I operate my trading, so you have some guidance and how margin % helps you keep an eye on your account too.
What is margin level %? This is calculated by your equity/used margin x 100%. . The closer you get to using 100% of your margin the closer you get to being stopped out. You always want a healthy margin. At least 500, over 1000 is better, when we are running large lot sized trades.
My daily strategy.
So, 80% of the time I let the automation do all the work. iX focuses are helping us earn more money and we pay for their knowledge, insight and experiences to trade on our behalf. For busy professionals looking to see their money work harder for them, then why not! Daily, I check my drawdown and my margin % to see how the account looks. A couple of minutes of my time. I'm happy when my with a drawdown of 30-50%, I’m comfortable with that now. As you can appreciate, we need to have active trades to make money. I also watch my margin % which anything over 2000% I do not even think or worry about. I get on with my day!
When the margin % is getting close to 1500% I will start to pay a bit more attention and see for myself what is going on with the currency pairs. Not in a stressful way, just more of an awareness. What are the expectations from currency movers, what macro-economic activities are going on and coming up that could impact our trades. Again, I will not do anything, I'll just put myself in a 'more observation and tracking' mode. I am just being cautious.
When I'm just below 1000% and economics indicators are not clear then I'll think about options open to me to start thinking about. When you are here you are making more rational, unemotional decisions and will make a clearer judgement. A plan to have just helps you keep calm. Options like a) add capital, b) close trades, c) reduce lot size to reduce risk. They are all viable options and I choose the one that feels most comfortable.
As the margin % starts to fall its then up to you when you want to take precautionary action. 300% is for some, others it is too low. When margin % is getting close to 100%, your MT4 app will start to flash. It an indicator to you to do something to save your account. If you do not your broker will take control and close trades. You have lost your decision making on the account. It’s too stressful to be there and you don’t make great decisions.
I'm sure you are asking if I have been close to a 100% and what did I do? Yes, once. I got to 250% and felt I needed to start managing the account and making decisions. I chose to close a large sell trade which meant a loss, but I increased my margin % back to 400%. That move left me room for the currency pair to recover and replenish my account. The currency pair turned around, trades began to recover, some trades closed in profit and some in loss but we were back into healthy margin % again. Beside that that closed trade, I did make a tiny profit on the eventual closing on all the other trades involved. So, a small loss overall but I was happy with the eventual outcome.
In all my time with using an automated service this was the first time I had taken action and I felt I made the right decisions at the time. With hindsight, I wish I had not closed that trade but when we are trading, we have to remain in 'reactive mode'. We cannot predict the future. The loss happened and I quickly recovered that loss through new trades set in the following weeks. Your mindset for trading is important. Have a read of my blog on my first year of trading and my learnings.
It’s now March 2020, and next week marks the end of the month, so I’ll be sharing my march results.
To understand your MT4 app please see read this blog post.
The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth.
Here’s an explanation of what you see in your MT4 and why you need to look at them.
Figure at top - your running profit or loss on all trades
Balance - This is your cash balance which includes the cash that is currently being utilised in your trades
Equity - Your balance minus/plus the trades - where you would be at if you closed all the trades at that moment
Margin - the amount of money you need in your account to be able to place a trade. Like a deposit.
Free margin - Equity less the margin. You want there to be equity. This is also where if you calculate your position if the market were to move against you to a certain point you can see if it takes up your free margin.
Margin level % - this is calculated by your equity/used margin x 100%. . The closer you get to using 100% of your margin the closer you get to being stopped out. You always want a healthy margin. At least 500, over 1000 is better, when we are running large lot sized trades.
So check in on your margin level daily.
The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth.
Drawdown is a measure of how far your account falls from the last account high to the low before you get back to the old high again. So, if your account topped out at £1,000 then dipped to £900 before recovering to £1,000 again, you've had a 10% drawdown.
Drawdown can be the source of lots of concern for a newbie trader. They see a minus number at the top of their MT4 app and get really concerned they are about to lose that number. So, I want to put your mind at ease with what I’ve learnt about drawdown and how to have the right mindset around it. I’m not an expert in this but this is my experience I’m sharing with you and if you need more technical information then I’d suggest do your own research around this topic too!
1. Drawdown is part of trading. It will happen every day when trades are set. Its part of the process. When new trades are set you may be lucky, and it jumps right into profit and you hit your target profit straight way, but I’d say 99% of the time drawdown happens first. Its going to be a part of the trading picture going forward.
2. Drawdown means that trades are in play and your money is being actively used to create the money growth activity that you want. If we didn’t set trades or have drawdown we wouldn’t be trading or seeing any profit. If this is not what you want to do then find another income generation method that suits your tolerance levels.
3. I make a note of the dollar at the 10% - 30% drawdown and keep those in my head when I am looking at moving Trade value at the top right of your MT4 app. This helps me roughly know where we are in the drawdown and help you see. For example, my account balance is valued at US$3362. 10% of that is US$336 and 30% is US$1008 so when I look at my MT4 ‘active money’ value I know roughly where I am within these numbers.
4. Drawdown doesn’t equate to losses unless all those trades that are showing loss are closed. They only count if they are closed. When they are in play, I have no problem with seeing the drawdown.
5. Become comfortable with your risk appetite. If you don’t like a lot of risk, then either don’t trade and find another passive income generating method or keep your account small so you are only risking what you can comfortably afford to lose.
If you are manual trader then your drawdown percentages and your risk appetite will be very different, and you will have to create your own risk management plan around your trading plan. There is a lot of wisdom out there on the internet on this.
NOTE: Past results can be verified and if you look in the tab called 'My Results' - you will see my results I have been sharing. Past performance is not indicative of future results. If you are interested in registering or getting more information on this trading system, please message me.
The images below show how the active trade values can vary in a timeframe. The first image is with around 14% drawdown. The second image is 10% drawdown. In an evening the drawdown has reduced and the AUDJPY is trading bearish!. I'm comfortable looking at this. Would you be?
Before you start ensure you have the IX app downloaded
or use the desktop version
(My name will pop up as I’m referring you to the membership)
4 Elements make up the process to set up your automation trading.
Nicholla will guide you through all of this with pdf instructions you can set up and start the automated trading quickly.
Step 1 – IX Membership
In order to be able to connect to the automation service (and all the other benefits such as manual trading alerts, personal development, business building) you need an IX membership.
You can access this at this link by the one I send you
You’ll create a user account and will need to verify your email address in your email account. You’ll then enter your user name and password again – you’ve now logged into your back office part of the IX membership.
This is where you will purchase your membership package. You’ll need just the premium version to be able to gain access to the automation.
Step 2 – Set up Your Broker account
This is where your money is actually held. This is where you will deposit and withdrawal your funds. IX Global has no access to this account. Its your your private account which you will need to set up and verifiy.
This broker we use has been around since 2009 and regulated across a number of countries.
I'll send you the instructions on how to set up your broker accounts and the key set up criteria. I can also answer any key questions.
It can take 24-48 hours to have your account approved by the broker after which you will be able to fund your account.
Step 3 – MetaTrader 4
Meta Trader 4 (MT4) is an app that you use to view (automation) and place your trades (if you are manual trading) and can be connected to a number of different broker accounts.
You need to download the app (MetaTrader 4) (Google Pay or Apple) and connect it to your broker account.
When your broker account is verified they will send you an email which states the following
MT4 Login (you will see this correlates with your broker account number)
You then open your MT4 app – hit the + sign and do the following
- Select Login to an exisiting Account
- Fine the Broker – this will be your MT4 Server name
- Login – Type in your MT4 Login (refer to your email from Vantage)
- Password – type in your MT4 Password (Refer to your email from Vantage)
- Click – ‘Sign in’
Your Broker account and MT4 are now connected and you should see your ‘Balance’ at the top if you have already funded your broker Account.
The important moment here is your broker and your MT4 app are talking to one another.
Step 4 – Connect to the automation
Once you have your membership, broker account, MT4 app is all sorted the last set is connecting to the automation.
You will register for the automation via email and you will then recieve your automation link credentials. I'll send you the instruction on how to set this up but its also shared in the IX Academy for your reference too.
Once this is connected and online you will see your trades appear on your MT4 account.
I serve people who want their money to work harder for them instead of it sitting in the bank.