Alpari-UK & The 2 Day Spot Rule?! (Live Accounts Only) - HELP!

[jammie]

Hi,

Well i've been making money on there demo accounts for almost 2 years, and figured i should take the plunge into the real world.

After looking at there T&C's closely, it seems that since they trade spot forex, positions are always liquidated after 2 days (48 hours?), regardless. Is this true?

If so, can anyone recommend any other meta-trader brokers who are regulated and UK based?

Really should add that to the demo though if its true, as most of my positions are based on longer time frames.

Many thanks,

Jamie

 

[Pharaoh]

Don't panic. ALL spot forex contracts expire after 2 days. 99% of brokers just roll you into a new 2 day contract sometime around the end of the trading day (often around 5 pm New York time, but this varies). That's also the same time that you pay or receive swap interest. Be warned, because of weekends, Wednesday is triple-swap day at most brokerages.

Be warned - I have heard of some REALLY sleazy brokers (not Alpari) that will change margin requirements for holding positions over weekends. Always read your customer agreement and any terms of service very carefully. Of course, if you are following sane risk management, even a change in margin requirements shouldn't hurt you.

 

[jammie]

Hey Pharoah,

Cheers for the quick reply, being rolled into another contract doesn't bother me much, and margin requirements don't really bother me either (i have quite a relaxed style)

Does being rolled into a new contract close the position, then open it at the new one? no big deal if it does, it'll just be annoying when i have 10 trades open and i have to track p/l being offset against the previous positions (if that makes sense!)

I really should just get an account and play around abit!

Thanks,

Jamie

 

[Pharaoh]

Technically, you get switched from one contract to a new at rollover, but from the trader's point of view, it's pretty much invisible (other than swap). Your positions will look like nothing happened other than some interest payments/penalties.

I've got 3 positions still open from the 13th on my broker (same MT4 platform you've been using). I won't have to worry about p/l until I close them.

 

[jammie]

ahhh! Phew!

Thats good to know! Would of been hard to trae daily charts if positions closed after 2 days! heh.

Just another quick question regarding margin calls -

Do margin calls occur when your available margin falls below 0 due to losses on open positions, thus they liquidate them? or is it when your equity falls below 0 so they liquidate your positions to stop you owing money? first one makes more sense but im just making sure!

Thanks Pharoah, means alot that you could help me out.

Best of luck with trading =]

Jamie

 

[Pharaoh]

Check the terms of service VERY closely. Some brokers liquidate when available equity hits zero, others liquidate sooner. Some vary the amount needed over a weekend as opposed to during the week. With slippage, a broker that liquidates at zero could actually let your account go a little below zero and leave you owing money.

If you trade reasonably, you should NEVER come anywhere close to a margin call, but it's still a good idea to check the terms carefully.

 

[jammie]

they liquidate positions when the free margin level is 20%. The closest i get is about 300% so i'm fine!

I can't wait for all my funds to clear now, 4 years of waiting and its all about to start properly now. Woo!