I’m still ‘playing’ on a demo account where the account is preset at £50,000 and each contract is a minumum of 100,000, so it looks like very healthy profits are to be made !
There’s no way I’ll ever reach that stage :o so I am wondering when I eventually go live with my tiny account of £250, how do I work out the true value of pips
in other words how much profit will I make ?
Also with live accounts are the contracts also preset ? or can you decide how much or how little you invest ?
Please don’t ask me to work it out myself my poor old brain cell is completely scrambled already with all this new information, I just want the true picture so I can come down off this fluffy pink financial cloud I’m floating away on at the moment
Methinks I will come down to earth with a bump
Thank you
I am spread betting, so this might be a little simplistic, but for me: pip value, profits etc. depends on the strategy you use, as it depends on timeframe traded, duration of trade etc. For example, I risk 1% of my account per trade. So on an account of £2000, I would risk £20 per trade. My broker permits a minimum pip size of 50p a pip, so on a £2k account I would risk a maximum of 40 pips. That might be enough for some swing trading on, say, the Hourly chart. I would target a minimum of 1% per trade - I would personally never use a R:R of worse than 1:1 - so would take a trade if the TP were 40 pips or better. If I were using a scalping strategy, targeting and risking fewer pips, I could increase my pip size - if my Stop were only 20 pips, then I could go £1 a pip, and so on.
So with a £250 account that would obviously be £2.50 total risk per trade, which with my broker would mean a maximum risk of five pips, which for my strategy is not enough, I would need a larger account, but I believe that some on here trade with small Stops.
Anyway, I might have missed the point of your question, but basically I am saying that I would look at the amount you want to risk on a trade as a percentage of your account, then when you see a setup that suits your strategy you see how many pips you would need to risk divide the % you wish to risk by the number of pips. That is your Stop, then take profit when price hits a 1:1 reward, or leave it in if it appears that price might run further in your direction, perhaps using a trailing Stop to lock in some profit.
For the way I trade, £250 would not give me any setups, but I think that the basic structure of my thinking still applies as one way of spotting when to take profit. Food for thought, at least, hopefully!
I do thank you for that reply - but have to admit I haven’t got a clue what you’re talking about - I’ve been back to school but can’t figure it out !
I do think the key to understand is in the terminology - like learning computers - that’s a foreign language at first isnt it ? - so unless it’s explained in terms that the average idiot can understand (me) then I just don’t get it - I think it might be time to give up
I’m soooooooo stupid
-just caught purples reply - now that I understand - but - one of my other questions was are you allowed to put on any amount you like or are the amounts preset ?
thank you
It depends on your broker. some will allow nano lots, or 10 cents a pip, some micro lots, $1 a pip, and some standard lots $10 a pip (its a bit more complicated than that but i dont want to confuse you.
if you have a broker who offers nano lots you can trade 1 nano lot at 10 cents per pip, or 2 nano lots at 20 cents per pip, or 3 nano lots at 30 cents per pip etc.
if you have a small account you should consider a broker like Oanda who allow you to trade at practically any size you want. 250 dollars would easily be enough to start to get some experience, and you’d be able to practice sensible money management.
if you can work out a way to be profitable from a 250 dollar account you can scale up from there, but its very hard work.
one standard lot is 100000 which is worth 10 per pip
one mini lot is 10000 worth 1 per pip
one micro lot is 1000 worth .1 per pip
one nano lot is 100 worth .01 per pip
$10 trade $.001 pip value
$1 trade = $.0001 pip value
see how the decimal places move?
remove a zero from the right hand side of the trade size and shift the decimal point one place to the left on the pip value.
Open an account with Oanda. you can trade as little as 1 one dollar. which would have a pip value of .0001
I started my first account with Oanda with $50 and was trading $50 trades so each pip was worth .0005 or five then thousanths of a cent. That’s great for learning. Not enough to hurt you financially if you loose but you get the benefit of learning with real money. you get to deal with real emotions even though it’s a small amount.
Thanks for the replies - it’s clearer now
ST - not your fault - my poor old brain cell is in overdrive at the moment :o
I get angry and frustrated with myself if information doesn’t ‘click’ immediately - I must try harder :rolleyes:
I do intend to add to the account over time, but just wanted to start small as advised to get my feet wet as it were
Thanks again
I’ve been back to school but can’t figure it out !