3 questions about margin

#1
Hey guys, I'm just starting with swap master and trying it out on demo for now. At my first attempt, the EA instantly closed parts of my positions because I had the margin limits set up wrong. I got it working now, but I have 3 questions:

1) Is it correct, that the function of the margin limits settings are basically to minimize downtime and spread costs? Meaning I could in theory disable them and once one account gets a margin call, the EA would close all positions, allowing me to reopen new smaller positions (BUT of course with new spread costs).

2) Are the following settings a good idea?
Image
Both accounts have a margin call at 30% margin level. My goal is to get a "medium" state but no action by the EA yet at 45% margin and to have the EA reduce positions at 35% (giving me some wiggle room).

3) I noticed that being wrong with position sizes is quite expensive, as I pay the spread only to have the positions closed seconds later. Is the following possible to prevent this on a live account: Instead of opening two positions of (for example) 1 lot I just open (for example) 8 positions (4 long and 4 short) of 0.25 lots. Therefore if I miscalculated or misconfigured, the impact is less moneywise. is this a good idea? Will the EA be able to manage all positions nonetheless?

Re: 3 questions about margin

#2
1) Is it correct, that the function of the margin limits settings are basically to minimize downtime and spread costs? Meaning I could in theory disable them and once one account gets a margin call, the EA would close all positions, allowing me to reopen new smaller positions (BUT of course with new spread costs).

The idea behind closing positions partially or even fully is to stay in full control. When you use limits to close trades partially, you buy time. This time can be used to re balance the portfolios.

2) Are the following settings a good idea? Image Both accounts have a margin call at 30% margin level. My goal is to get a "medium" state but no action by the EA yet at 45% margin and to have the EA reduce positions at 35% (giving me some wiggle room).

No. There are a few problems with these settings.

a) The medium limit should be higher than the low limit. Best practice is to use the medium limit to either close trades partially or use the medium level simple as warning level. Furthermore, the limit is defined in % and as no broker will keep your trades open when there is no margin left, you should not use a negative number.

b)The low limit should be used to either close a large part of the trades or close all trades.
When you set limits and want that the EA close trades (partially or fully), you need to change the input value from the parameter 'Partial close/Medium Limit' to 'Yes'. Otherwise no trades will be closed.

3) I noticed that being wrong with position sizes is quite expensive, as I pay the spread only to have the positions closed seconds later. Is the following possible to prevent this on a live account: Instead of opening two positions of (for example) 1 lot I just open (for example) 8 positions (4 long and 4 short) of 0.25 lots. Therefore if I miscalculated or misconfigured, the impact is less money wise. is this a good idea? Will the EA be able to manage all positions nonetheless?

Yes,making mistakes with trades and position sizes can be an expensive hobby. Best practice is to setup several portfolios on demo accounts before using live accounts.

I hope this helps.
Alexander

Re: 3 questions about margin

#3
Thank you for your answers. But I'm still unclear on a couple of things:

Furthermore, the limit is defined in % and as no broker will keep your trades open when there is no margin left, you should not use a negative number.

But when I set up my portfolio on a broker with margin call at 30% using 100% of my available margin with a setting of "30" for low level, I instantly get the medium level warning:

Example:
Image
Margin level is 90%, far off from 30% where margin call occurs - no warning or action required, but Swap Master shows:
Image
Red level, meaning it would close trades at this point, which is too early.

When I use "-30", everything is as I want it:
Image
Or am I wrong? Don't seem to get it...

Yes,making mistakes with trades and position sizes can be an expensive hobby. Best practice is to setup several portfolios on demo accounts before using live accounts.

Of course I'm doing that atm. But once I go live, can I do it as I suggested just to be sure, i.e. opening multiple smaller positions instead of one big one?

Re: 3 questions about margin

#4
Now with images:

Thank you for your answers. But I'm still unclear on a couple of things:

Furthermore, the limit is defined in % and as no broker will keep your trades open when there is no margin left, you should not use a negative number.


But when I set up my portfolio on a broker with margin call at 30% using 100% of my available margin with a setting of "30" for low level, I instantly get the medium level warning:

Example:
1.JPG
1.JPG (13.04 KiB) Viewed 20103 times
Margin level is 90%, far off from 30% where margin call occurs - no warning or action required, but Swap Master shows:
2.JPG
2.JPG (146.76 KiB) Viewed 20103 times
Red level, meaning it would close trades at this point, which is too early.

When I use "-30", everything is as I want it:
3.JPG
3.JPG (124.31 KiB) Viewed 20103 times
Or am I wrong? Don't seem to get it...

Yes,making mistakes with trades and position sizes can be an expensive hobby. Best practice is to setup several portfolios on demo accounts before using live accounts.

Of course I'm doing that atm. But once I go live, can I do it as I suggested just to be sure, i.e. opening multiple smaller positions instead of one big one?

Re: 3 questions about margin

#6
Red level, meaning it would close trades at this point, which is too early. 1.JPG

The closing functions are based on the available free margin. You do not have any open trades on the Swissquote account but there are one or more open positions on your ActiveTrades account.
flow_accounts.png
flow_accounts.png (50.68 KiB) Viewed 19429 times
On the ActiveTrades account, there is no free margin left and it is actually interesting that ActiveTrades does not close the trades. If you want to use this account for testing, close the trades on the ActiveTrades account and then setup the portfolio again.

When I use "-30", everything is as I want it.

Yes but that just removes the red warning. It does not solve the problem. And that is that there is no free margin left on the Active Trades account.

Of course I'm doing that atm. But once I go live, can I do it as I suggested just to be sure, i.e. opening multiple smaller positions instead of one big one?

Yes, you can do that. When you have a ready setup, I can also help you to check it. Simple send me a short E-Mail and describe me your plan and I will do my best to provide some valuable advice.

I hope this helps.
Alexander
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