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Account balance vs leverage

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  • Account balance vs leverage

    I'm a novice FOREX investor, so I apologize in advance if my question doesn't really make sense. My question is in regards to a FOREX account subscribed to an EA signal (I actually have several trading accounts attached to several different EAs). As a US resident, I am slightly leery of depositing the entirety of my funds in an unregulated brokerage account overseas. Given an investment amount of $50,000, would it be possible to deposit only $10,000 into my brokerage account and keep the remaining $40,000 in my bank account here at home? Then since my intended investment amount is actually $50K, is there a way to use leverage and/or increase the risk amount by 5x to effectively have $50K risked?

  • #2
    Originally posted by fiveninefish View Post
    I'm a novice FOREX investor, so I apologize in advance if my question doesn't really make sense. My question is in regards to a FOREX account subscribed to an EA signal (I actually have several trading accounts attached to several different EAs). As a US resident, I am slightly leery of depositing the entirety of my funds in an unregulated brokerage account overseas. Given an investment amount of $50,000, would it be possible to deposit only $10,000 into my brokerage account and keep the remaining $40,000 in my bank account here at home? Then since my intended investment amount is actually $50K, is there a way to use leverage and/or increase the risk amount by 5x to effectively have $50K risked?
    Great question.

    I was discussing this with a broker just last Friday.

    You certainly can trade with a "notional" $50k, but only park $10k with the broker. You simply need to run your EA/strategy at 5x risk and have your additional $40k on hand if required to top up margin. This is how a lot of larger investors trade to help mitigate the broker risk.

    If you're wanting to follow SteadyCapture or GoldStar under this model we can set you up with SimpleTrader trade copier at LMFX, that will allow you to make this adjustment.
    Click here to check out the most popular forex channel on YouTube

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    • #3
      Awesome, thanks for the reply, Nick. This was what I was thinking, but I wasn't sure if this was the best way to implement what I was trying to do. I'm already hooked up with Goldstar, SimpleTrader, and a couple other copiers through LMFX. This has been a great year so far. Looking forward to the rest of it!

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