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Wolfire

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About Wolfire

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  1. Is it possible for a true STP/ECN broker to provide 500:1 leverage? Banks typically provide maximum leverage ranging from 10:1 to 25:1 depending on a variety of factors ranging from credit worthiness to the currencies being traded. Greater than 30:1 leverage is unheard of in the Tier 1 (Bank) PB environment. Banks are very picky about who they will lend money to. As a result, a major money center Prime Broker would not accept a high leverage broker as a client, especially given the risks involved. If you hear someone marketing themselves as a "institutional liquidity provider" or "prime broker" and offering leverage greater than 100:1, don't be fooled; it's quite possible that they're using a market-maker/dealing desk model in some shape or form. Assume a client executes a USDJPY 5,000,000 trade at a leverage of 500:1. This trade will necessitate a USD 10,000 margin (5,000,000 / 500). To execute the corresponding matching trade with its bank liquidity provider at 25:1 leverage, the broker would need to use USD 200,000 (5,000,000 / 25) in margin with its prime broker. To maintain the same size trade, the broker must use 20 times more capital than the client.
  2. This system is very similar to something I currently use, but I've added the 3 and 6 ema to my system because I believe it improves it, so thank you.
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