New Margin Requirements – Impossible to trade seriously
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The new margin requirements have completely screwed me. I used to run 6+ strategies live and now I am having difficulty running half that.
Running multiple strategies on multiple markets was part of my edge and the ESMA has now thrown that edge out the window.
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Well the new requirements have indeed made everything alot tougher. You need alot more capital to run 6 strats now, and thus ur total % earnings have decreased even though ur using the same amount of risk..
That being said: If u got 6 strategies that consistently gets profit, but you can only afford to run 3 of the now. Run 3 for 1 year, then you should be able to run the other 6… Shit is just going to take alot more time now, but if you got good strategies/algos, then just keep running ur best of the best until u can run them all.. Yes it sucks cus 6 = more diversified than 3 (usually at least), but the new requirements shouldnt mean that its no longer possible to make money in the markets anymore, things are just gonna be alot slower.
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That would have been fine if I had a sufficient enough second income, but I’m a full-time trader since resigning last year to do this full-time.
The strategies were my bread and butter. But have already decided I will simply move my account to IG Switzerland
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Yes guaranteed stops are more expensive (if they get hit) and you are forced to use them on every trade. This also means that you cannot trade on all markets as some do not allow them. The minimum distance for the stops is also larger than on a standard account I believe so a trailing stop won’t be able to get very close to your position. A dynamic stop is not possible as I believe that you cannot move your stop further away than the starting level in a limited risk account.
I think you just send a normal stop instruction and IG turn it into a guaranteed stop – but I have never done it so I can’t fully confirm this.
I believe that ProOrder is now available on limited risk accounts but if you have tested a strategy on a standard account then it might not behave the same on a limited risk account especially if you have trailing or dynamic stops.
Interestingly if you have a limited risk account and then use a PRT demo account with it the demo account behaves like a standard account so it is impossible to test strategies as if they were running in a limited risk environment.
So far everything I have seen about a limited risk account is that it increases your risk of losing money.
Exact information on the limits of limited risk accounts seems very hard to find and IG have very little about the specifics on their website.
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Nicolas’s description here is the most detailed that I can find on the subject but it is from 24 January 2018 so things may have changed:
https://www.prorealcode.com/topic/proorder-on-limited-risk-account-available/
Hello everyone, I just received this news important enough to deserve a new post.
Automatic trading with ProOrder is now available for the “Limited Risk” accounts for Italy (since yesterday), Spain (will be activated today), Sweden (by tomorrow) and UK (most likely for next week).
For the record, here are the constraints related to automatic trading with limited risk accounts:
- Stops followers: Stop followers are not allowed on limited-risk accounts
- Guaranteed Stops: All ProOrder protection stops are automatically converted to guaranteed stops. On this type of stop, the level of execution is guaranteed, even if the course evolves brutally against you. Special pricing applies (only if the stop is triggered)
- Attached Stops: A protective stop must be attached when opening a position or placing a purchase / sale order. In the code, the SET STOP pLOSS statement (for example) must not be in a condition (IF / ENDIF)
- Distances of stops: It is not possible to move a protection stop away from the position (ie SET STOP pLOSS x, where x variable requires never to increase x after the stop, but it can of course be brought closer to Condition to respect the minimum difference between the price and the new stoploss value)
- Hedging: Limited risk accounts do not allow you to be both long and short on the same value. Therefore, it is not possible:
To have a strategy LONG and another SHORT if these strategies are launched on instruments with a common underlying (eg France 40 and France 40 mini)
To set 2 limits of opposite direction on the same value
To place a stop in the opposite direction to a position, between the position and its protective stop
In addition :
The minimum stop distances are greater than the so-called “expert” accounts (current normal account), the information of this distance can be found in the instrument’s manual trading information (expressed in points or percentage for actions ).
Since the follower stop will not work, the SET STOP TRAILING instruction will be inoperative, so I advise you to use the coded trailing stop you find in the blog part of the site (many strategies already use it in the code library and in the forums).
The stoploss can be far from the entry price, far enough, but you must take into account your margin required to place it (of course you can not lose more than the size of your money account, so be vigilant at Level of the stoploss).
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