Volume, Lot, Leverage, Pip, Pipette

[pigwiddeon]

Hi all,

I am spending much time on Forex demo accounts and many websites for almost a month but I still cant get the basics. I read different sentences to define these terms, volume lot, leverage, pip, pipette.

I am using the platform MT4 and it asks for volume, I guess it is same as lot, but not sure.

Let's say I am trading with an account of 100$ balance and 100:1 leverage. I want to trade EUR/USD, which has 5 decimals (as I know it means the broker uses pipettes). Questions are below according to this.

Questions

1- People say traders should risk no more than 2% of their account for a trade. How can I determine the money I risk in MT4? For example, I write 0.1 to the volume (again, not sure if it is same with lot), how much do I risk with?

2- What would be different than this situation if there were 4 decimals, which means the broker doesn't use pipettes?

3- If I am reading a strategy which has example numbers with 4 decimals, how can I convert it to 5 decimals? Briefly, he is using pips and I am using pipettes. Do I just simply divide it by 10?

Thanks for your answers.

[jamessheppard]

Habe you been through the school if pipsology (top left tab)? If not do so because it explains this on there. It also has a link to the position size calculator which you will find useful (i think its in the tools tab as well).