December 11, 2008

Question: How to manage Forex account when it reaches millions?

I will be ordering your course material after the holidays but have a brief question, if you would be so kind.In running the "Forex Trading Income Calculator" I understand the concept of re-investing and compounding your profits and of course the results are astounding to say the least.I guess my question is this: when you have a smaller account size (even 100k or so) trades would seem more manageable but if and when your account reaches that rarified area of a million is the account, and therefore the results, still manageable? Or is it that by the sheer size of the Forex market itself that trading a million dollar account is still small in comparison? I compare this to say trading stock options where if one had a million dollar account to trade daily you may not be able to buy enough options on a particular stock because they are just not available.

Any answer is appreciated.

Jim

Hi Jim.

The difficulties in both trading Forex and in managing accounts exist only in the mind of the trader. It is no more difficult to open a trading account and click on buy or sell and set the size of the trade to 2% risk or 5% risk on a $300 account as it is on a 3 million dollar account. The process is exactly the same. The only difference would be if the trader created some kind of difficulty mentally or psychologically. You might be surprised at how many traders have used the excuse that it is easier to trade with more money and that is why they cannot trade well with a small account. Now some people also believe it is easier to trade with less money and more difficult to trade with more money. I am not sure where people get either idea because it should be fairly obvious that the process is still opening a trading account and clicking on buy or sell after figuring the percentage of risk. The percentage of capital at risk should always be the same but the dollar amount would be different. And of course most human beings create various mental challenges over that difference in dollar amount.

In the Forex market currencies are always available to buy or sell because in the interbank market there is always a bid and ask price on Euros, U.S. dollars, etc. Is there ever a time when you could take a million Euros into a bank and ask to exchange them into dollars and the bank would not have an exchange rate available to accept the currency? They will always accept the exchange of currency.

Scott

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