Limited Risk Account

[Markuskotze]

I am completely new to trading, I have spent the first couple of weeks doing all the courses at the online academy.

I want to start trading live, the problem is on my account, I can only set a guaranteed stop loss, which is up to 500 pips away,

surely this is not safer that being able to set the stop loss 30 pips away?, am I understanding this wrong

Any advice on this will be much appreciated.

[Caseynotes]

Hi @Markuskotze & @Merley,  Mark, did you choose a limited risk account on which you can only use guaranteed stops and protects you from a negative account balance, check your account settings in your 'My IG' as you may be able to opt out of having the limited risk if that's really what you want to do.

[Markuskotze]

Hi, Thank you for your answer, The only reason I am unsure is that the guaranteed stop is a lot more pips than the normal stop, if for example I was to buy Bitcoin @5164, the min guaranteed stop is  516 pips, on my Demo account on the same trade I could set the stop @ 30 pips.

am I understanding it wrong?, surely 516 pips is a much larger risk than 30 pips is the limited risk account not to limit risk?. 

Or is the normal stop loss still @ 30 pips and the guaranteed stop @ 516 pips in case of slippage?

Sorry for all the basic questions, I am very new to this, and would like to understand it clearly before investing real money and making some bad decisions.

 

 

[Caseynotes]

@Markuskotze, that's correct, the liquidity in bitcoin during a pump (up or down) can be horrendous, nobody is willing to take the other side of your exit,  IG are a broker, they just match buyers to sellers (for the most part) and if no one is willing to take your get out dump (stop loss) then you are stuck with an open trade until someone finally is willing to and that could be way down the track (slippage). So yes the guaranteed stop is going to be much further away, especially for bitcoin though no way near so much for most other markets.

@Merly is correct in his proposal but the same problem will occur, you can have an order sitting there but if price jumps over it (slippage) then it wont get filled either.

[Markuskotze]

Thank you very much,

 

Any advice for a new trader in terms of what market to start out with?

[Caseynotes]

6 minutes ago, Markuskotze said:

Thank you very much,

 

Any advice for a new trader in terms of what market to start out with?

Yes indeed, you may have discovered bitcoin is not really the best market to learn on, it's prone to serious pumps and then long periods of very little movement (for the last 9 months or so anyway).

I would keep away from commodities to begin with as they are a bit more specialist though gold is always interesting, I would recommend an index such as Ftse and a fx majors pair such as usdjpy because they are both reasonably well behaved and not so prone to wild moves, you can take a look at eurusd but you will see it's ATR is very dull and has been for some time now. I would keep away from Dax and Dow as they can rip suddenly and you need quite deep pockets for the S&P because the margin is so high (as is Dow's).

hope this helps.

[Markuskotze]

Hi, Thank you

 

You have been a big help, I am going to get going using your advice, will let you know how it goes, would you