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Turning Up Heat on Zulu/Saxo Account

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Zulutrade has a feature called “Margin Call -o- meter”(MCOM). Generally, it is very useful tool, particularly to discourage unexperienced persons to take excessive risk. Just like warning signs on the cigarette packs …

I’ve added 7 signal providers to my account. Each is enabled for one trade and one lot only. MCOM is in the red with a reading of 103.8%. Every time I log in, there is a warning that the positions limits exceed recommended trading size and there is a risk or margin call.

However, if all the signal providers open max allowed positions, the account would be exposed to about 1:1.8 leverage. In real life, max margin utilisation in Saxo account is just about 1%. Even is all signal providers open max positions and close each and every trade with 200 pip loss (a remote, yet real possibility), the damage would be limited to about 5% of the account value.

I’ll override the recommended trade limits to increase the leverage limit to about 1:5 and set % of equity stop-loss limits. If at any time loss exceeds 10% of account equity, I’l review the limits again.

P.S. Unless you check your account at least daily, I’d suggest to stick with trading limits as recommended by zulutrade MCOM.


Written by A.S.

November 9, 2009 at 9:03 pm

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