HomeDaily ResultsMegadroid Results: Tues 16th June 2015

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Megadroid Results: Tues 16th June 2015 — 13 Comments

  1. Hello Richard,

    can you let us know what is the typical ratio “order size / balance” you use on your MD accounts ? Do you run other trades on the same account where MD is active?

    Other curiosity: why do you switch Remote Safety Mode off on Activtrades?

    Thanks
    Albe

  2. Hi Albe

    can you let us know what is the typical ratio “order size / balance” you use on your MD accounts ?

    I trade 250k size (2.5 lots) spread across 8 accounts. So I trade about about 3 mini lots (30k) per account.

    I try to keep the balance in each account to a minimum. The actual balance depends on the leverage of the account i.e. for lower leverage accounts (i.e. 1:50 US accounts) I need a larger maintenance balance that higher leverage accounts. So it varies.

    Do you run other trades on the same account where MD is active?

    Yes, I do. I’m currently replicating trades that I manually place on my main (non-MT4 broker) account, on some of these MT4 accounts, using a custom trade replicator EA. I haven’t posted these results publicly. I spend most of my time trading that account. I’m replicating these trades as a test at this stage, just to see how the MT4 brokers execution compares to my main account.

    Megadroid performs OK with other EA’s running because it uses a order identifier “MagicNumber” to identify it’s trades

  3. Hi Richard,

    I have two questions, please:

    1. You said you trade about 3 mini lots (30k) per account, you try to keep the balance in each account to a minimum, and that the actual balance depends on the leverage of the account. Then, what should be the minimum maintenance balance for lower leverage accounts (i.e., 1:50 US accounts) to trade 1 mini lot (10k)?

    2. It appears that OANDA is offering 1:20 leverage currently. With 1:20 leverage, what is the absolute minimum maintenance balance needed to trade 1 mini lot (10k)?

  4. What you need to do is make sure you have enough money in the account so that it won’t margin call if a trade goes bad. Megadroid’s trades can have floating drawdowns of over 100 pips. For safety lets say 150 pips.

    First thing to do is to calculate the opening margin i.e. the amount of margin used when you open the EURUSD trade. That will depend on the account leverage.

    For a 10k EUR/USD position on a 1:20 leverage account…

    Margin required = 10,000 x 1/20 = $500 EUR = about $570 USD.

    If that 10k position was negative 150 pips, that would be another 150 USD of margin i.e. $720 total.

    So with a 1:20 account, you’d need around 1k USD balance, for one 10K EURUSD trade.

    Brokers “margin call” accounts at various levels – usually between 10% and 30%. So with a 1k USD account you’d need between $100 and $300 of free margin depending on the broker.

    Megadroid can have up to 4 trades open at once, so you’d need to have about 4 times that balance. i.e. 4k USD total to trade 10k EURUSD safely on a 1:20 account, assuming up to 4 open 10k EURUSD trades at once.

    Another example to clarify the point…

    Say you were trading 30k size (i.e. 3 mini lots) on a 1:400 account.

    The opening margin requirement for 30k EURUSD = 30,000 x 1/400 = 75 EUR = about $85 USD.

    With a 150 pip floating drawdown that would use 150 * $3/pip =$450 of margin. So a total of $450 + 85 = $535 margin.

    So you could probably safely trade ONE 30k position on a $800 account and still be comfortably above the margin call threshold. Again you need to multiply that by 4 because Megadroid can have 4 trades open at once i.e. a $3200 balance would be required to safely trade 3 mini lots on a 1:400 account.

    So the account leverage has a huge impact on the amount of money you need in your trading account.

  5. Thank you very much for your detailed explanation, Richard! Very informative, indeed.

    I reported earlier that, on June 12, neither S2 trades nor DollarAveraging (1.5x) orders were entered on my FXCM, MB and OANDA accounts while your results show both S2 and DollarAveraging trades entered accordingly on your accounts. I thought for a while I may have overtraded. But my account balances at that time were well over the minimum maintenance balance you suggested. And yet, MD failed to open S2 and 1.5x trades. This makes me wonder if there’s anything wrong. In fact, I’ve never seen 1.5x orders ever since I traded MD on the three accounts early April.

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