Traders First: Account leverage reduction - Why optional for brokers and not for traders?

PanagiotisCharalampous
21 Jul 2022, 10:58

Hi ncel01,

As far as know, you can ask your broker for the leverage you want for your account. Also cTrader offers the option to traders to change their leverage but in needs to be enabled by the broker.

Best Regards,

Panagiotis 

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ncel01
21 Jul 2022, 12:08

RE:

PanagiotisCharalampous said:

Hi ncel01,

As far as know, you can ask your broker for the leverage you want for your account. Also cTrader offers the option to traders to change their leverage but in needs to be enabled by the broker.

Best Regards,

Panagiotis 

Join us on Telegram and Facebook

 

Hi Panagiotis,

I've checked this across a lot of brokers and the account leverage is fixed and equal to the maximum allowed by the applicable jurisdiction.

Maybe some brokers offered this option in the past, when they could apply 500:1 to the European residents, but now, with a maximum of 30:1, it looks like lowering the leverage has become an impossibility.

Yes, "need to be enabled by the broker". That's exactly the issue here. As I mentioned brokers do not provide this feature, making it useless.

Maximum account leverage shall be controlled by the broker as this is a legal requirement, that's okay.

On the other hand, lowering the account leverage should not be dependent on any broker decision as it is only about risk management and it's not up to any broker to (somehow) control this on traders' behalf.

My intention (cBot):

I would like to normalise the account margin/margin level for a lower leverage (10:1) across a range of different instruments (to which different max. leverages apply).

This could be easily achieved by simply decrease the account leverage to this amount.

On the other hand, it seems "impossible" to code if considering currency conversion applied to multiple cBot instances, since "position.MarginUsed" is not available in API. 

It would be great to have position.MarginUsed available since the account currency and any possible conversion ratio is already considered.

There's a simple formula to get to position.MarginUsed, however this is not the case when currency conversion is involved if working with multiple cBot instances, since the conversion price on opening, would need to be shared between them for all the account active positions.

Do you have any suggestion how to have this implemented?

Thank you!

PanagiotisCharalampous
21 Jul 2022, 12:15

Hi ncel01,

On the other hand, lowering the account leverage should not be dependent on any broker decision as it is only about risk management and it's not up to any broker to (somehow) control this on traders' behalf.

Well we cannot enforce this on the brokers, it's their business and its their choice what they will offer to their clients. On the other side nothing prevents you from not utilizing the given leverage and trade less.

On the other hand, it seems "impossible" to code if considering currency conversion applied to multiple cBot instances, since "position.MarginUsed" is not available in API. 

Account.FreeMargin is available so you can start from there and with simple maths calculate the margin based on the leverage you want to use.

Best Regards,

Panagiotis 

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ncel01
21 Jul 2022, 22:59

RE:

PanagiotisCharalampous said:

Hi ncel01,

On the other hand, lowering the account leverage should not be dependent on any broker decision as it is only about risk management and it's not up to any broker to (somehow) control this on traders' behalf.

Well we cannot enforce this on the brokers, it's their business and its their choice what they will offer to their clients. On the other side nothing prevents you from not utilizing the given leverage and trade less.

On the other hand, it seems "impossible" to code if considering currency conversion applied to multiple cBot instances, since "position.MarginUsed" is not available in API. 

Account.FreeMargin is available so you can start from there and with simple maths calculate the margin based on the leverage you want to use.

Best Regards,

Panagiotis 

Join us on Telegram and Facebook

Hi Panagiotis,

Well we cannot enforce this on the brokers, it's their business and its their choice what they will offer to their clients. On the other side nothing prevents you from not utilizing the given leverage and trade less.

In my opinion it is not about enforcing anything but not providing brokers with this option. I also don't see it as their business but traders' own money, when it comes to risk management. A point of view fully compliant with a Traders First policy, I believe.

Yes, trading less is always possible, however for some reason financial authorities define a maximum leverage to be used. In any case, this wouldn't help with the automated solution I would like to implement.

Account.FreeMargin is available so you can start from there and with simple maths calculate the margin based on the leverage you want to use.

Yes indeed, but I am afraid this won't be a simple calculation if the traded instruments are given different leverage levels.

However, I think I possibly found a solution for this. Not as effective as reducing the account leverage, of course, but still feasible, I believe.
Also not as effective as reducing the account leverage, get the position.MarginUsed would help a lot in such a case. I really think that adding this wouldn't be redundant but an improvement.

Last but not least:
Mentioning for extra features/ API solutions doesn't really mean cTrader is (somehow) limited but it does mean it is great!
And believe me, I really appreciate the work you all have been doing!

Thank you once again.

karatedog
28 Aug 2024, 09:37 ( Updated at: 28 Aug 2024, 10:06 )

RE: RE:

ncel01 said: 

PanagiotisCharalampous said:

Hi ncel01,

As far as know, you can ask your broker for the leverage you want for your account. Also cTrader offers the option to traders to change their leverage but in needs to be enabled by the broker.

Best Regards,

Panagiotis 

Join us on Telegram and Facebook

 

Hi Panagiotis,

 

I've checked this across a lot of brokers and the account leverage is fixed and equal to the maximum allowed by the applicable jurisdiction.

Depends on the broker.

I was using OANDA (HQ-ed in Malta), and I could chose between 1:1, 1:5, 1:20:, 1:30, 1:50, 1:100 leverage. Then European rules came by and OANDA sold the Malta branch to TMS (Polish broker), becoming OANDA TMS.

Now OANDA TMS offers fixed leverage based on product type. Forex majors are usually 1:33, indices 1:20 and stocks 1:5, there is no way to change it.

This all depends on the broker, and most broker systems are stone-age with their user facing parts (their backoffice execution might be state-of-the-art, I have no idea). 

The best example of “good” broker system will always be the crypto brokers, like Binance where you can decide on EACH trade how much leverage you want to use up to the maximum.

Also almost none of these brokers offer 1:1 leverage which would be extremely useful for beginners, especially with shorting as on a 1:1 margin (which is None), there should not be any margin call or liquidation.