Podcast:
Podcast: Play in new window | Download Subscribe: Apple Podcasts | Spotify | Android | iHeartRadio | Blubrry | TuneIn | RSS
What proportion of your money should you trade?
In this weekly video:
00:29 – How much of your savings should you trade?
01:02 – The 2 different options for you
01:45 – Trading example
02:02 – This is a discussion – NOT financial advice
03:00 – Which is the best choice for you?
04:14 – Don’t keep all of your funds with one broker
05:18 – Email me with any questions
Should you put all of your money and your savings into your Forex account trade that, yes or no? Let’s talk about that and more right now.
Hey, traders, Andrew Mitchem here, the Forex trading coach with video and podcast number 307.
Now I’ve got a really interesting topic to discuss today.
How much of your savings should you trade?
Now it came back from an email here from a client of mine and we talked about this in quite some depth on my latest live Webinar with my clients that I hold each week and it was all about what should we do with our funds. And basically this guy said, “Should I put my savings and take money out of my bank account and put it into my trading account based on the fact that, we trade a strategy that works and based on the fact that we trade low risk per trade?” What should I do? And he said, “Well, basically, really is there any advantage one way or the other what I do?”
The 2 different options for you
So the two scenarios would be one, I take out a funds and additional savings, put it into my Forex account, trade it really low risk. And probably make way more than the bank are ever going to pay me in a year, I’m probably going to make that in a month and that would be very fair pull. The other thing we discussed was, why don’t you maybe look at putting half of that money that you would allocate to your Forex account into your account and half leave with the bank where sure, short may be earning very, very low interest rate but also, I suppose you could say it’s secure or secure as you can get. So there’s two different options. And if you took that second option, of course you could say, let’s pick some numbers.
Trading example
Let’s say I had $100,000 to try up at $50,000 and with my broker, 50,000 in the bank. And I’m assuming when I trade, I’m trading a 100,000, so I’m doubling up on my normal risk. So you’ve got a couple of options there and you can play around with the numbers as it suits you.
This is a discussion – NOT financial advice
The important things are this, there’s two things really. Number one, I’ve got to say this is not financial advice. I’m not saying you should go and do this. This was purely a discussion that we had on the live Webinar and I just wanted to share it with you because I think it’s something that a lot of people don’t give you that normal everyday experience. And this is coming from experience. This is not a suggestions or advice, really important that point. The second point is that I’m assuming that if you’re thinking, “Hey Andrew, which way do I go?” That you can actually trade
And that’s another really important point. The guy that I was talking about, he can trade, he’s been in all my course for awhile. He’s doing really well, low risk, et cetera. He’s not gambling, he’s not doing silly things. So there’s a couple of assumptions there. I’m assuming that you can trade profitably, consistently and you’re taking low risk. So assuming that comes into play, and if you can’t do that, then you need to come and see me first of all. But assuming you can then, which way you go?
Which is the best choice for you?
Well the choice of course is really yours, but just a few things to be aware of, here in New Zealand as a company that I’ve been using over the last year or so. It’s called Halifax and Halifax in Australia had something happened back in around October, November, and as a result of Halifax Australia owning part of Halifax in New Zealand, which by the way, we’re a really good broker.
Our accounts have been frozen, so I’ve got a substantial amount of money personally, plus a lot of other people have. And our accounts are being frozen for the last three months. I can’t trade my Halifax account. I don’t know whether I’m going to get all my money back, some of it, when that’s gonna happen, I don’t know. So I’m in a bit of a predicament here with Halifax right now.
So the lesson from that is, I can’t do anything about that frozen account right now. Am I annoyed? Well, kind of, but I can’t do anything about it, so I can’t take my money out. And that could happen to another broker because don’t forget I chose Halifax because I felt they were really good broker and they were up until this happening. And it was actually outside of the, I suppose, the control or the people I had my money with.
Don’t keep all of your funds with one broker
So the point is this, if you load up and put all your money with one broker and that happens, either your account’s frozen or you might even have that money completely lost or partially lost, who knows. That’s a big risk and you can’t have that happen. I’m fortunate in that I have my fund spread amongst several brokers and I think that’s important also. If you are in that position that you are trading well, you have a reasonably large trading account or even if it’s a small account, don’t put everything … don’t put all your eggs in one basket in terms of the brokers. So that’s important also.
So really important that you split your funds up between brokers. I think that’s a really important point and potentially you might want to say, I’m going to put partial funds with the brokers and the other with the bank and double up on my risk or I’m going to put everything there because my bank’s paying me virtually nothing and I’m going to trade it because I know that I can trade well and with low risk.
The choice is yours. As I said, don’t take this as financial advice, it is not. It’s just suggestions based on my knowledge, my experience, so I hope that helps.
Email me with any questions
Any questions like that or anything else to do with trading, just send me an email, [email protected] and I’ll gladly help you out on future video and podcasts. So bye for now. See you next week.
Click Here To Know More About My Course
Podcast: Play in new window | Download
Subscribe: Apple Podcasts | Spotify | Android | iHeartRadio | Blubrry | TuneIn | RSS
Trackbacks/Pingbacks