so what is the amount that I have to enter on the trade for the $200 micro account? this is $1000 per lot
Just wanted to make sure that I don’t type in the wrong amount and get margin calls. I got lots of it on the demo.
i forgot to mention. Im a day trader. I hold a position from 1 hour to 2 days.
Personally I wouldnt exceed 1% of account balance at any one time. Therefor on a $200 account lot size would be $2.
thanks R Carter. So $2 it is. Onwards I go to piphunt! 
Should clarify… as its hotly debated here on BP. There are two ways to quantify this. Either 1% of balance as your SL position or 1% of balance as your trade size.
Obviously 1% as Stop Loss is a more conservative aproach. 1% as trade size I think is reasonable but your SL will reflect your actual percentage risk dependant on where its placed.
Hope I havent confused. 
i think R Carter is confusing you or your confusing him, but the way i see it is if you start playing around with $2 pips then you wont see the day out.
The minimum lot size you want to enter when opening a trade will be 1 lot, and then you will be trading for 10cents/pip.
Then from there you can calculate your risk. If your willing to risk 2% of your $200 account per trade then your SL would be 40pips back from your entry resulting in $4 loss.
If you follow this and have a set of trading rules that you will follow then if your lucky you might see the month out.
Good luck and dont be afraid to keep demoing
Not sure how I have confused the issue? I stated a $2 lot size not $2 a pip… $2 lot size = 20 cents a pip.
Here on BP I see posts stating risk should not exceed anywhere from 1-5%. Personally I use 0.25% of account balance as lot size therefore a 40 pip loss would equal 1% of account balance. I trade the daily and therefore might have multiple positions open but scale in trades as and when the former trade/ trades are in profit and SL is inside the trade/ trades.
I stated 1% of account balance as an acceptable risk. A conservative aproach would be 1% as SL. More risky would be 1% as lot size. If lot size then the SL will determine the percent risk… or am I missing something here?
The ammount of risk is determined by the SL that you use, which in turn will determine your trade size. If you use a set SL value ie. 40pips this should be no more than 2-5% of your account. in this case 2% equal to $4. Divide this ammount by the pip value ( $4 /40 ) and that will be your trade value ie. 10cents. your max risk is $4. If, however, you determine that 40 pip SL is inappropriate for that trade, either to big or to small, then determine what is appropriate ie. Sl placed at major MA plus 5 pip for example and that is equal to 20 pips, then perfom the calculation ( 2% of account = $4. $4/20 = 20cents ) your trade value in this case can be 20cents with a max risk of $4
just check your maths perhaps?
40(SL)*20cents/pip = $8 loss (which would be 4% of $200)
also,
the minimum lot size with fxcm micro is $1000 (which is 10cents/pip), i’ve never heard anyone use a $2 lot size and that certainly doesnt equate to 20cent pips.
[B]TRAV72[/B]
Seems I have inadvertantly sustituted lot size in my recent post but previously did state trade size as above. I’ve no idea of mini account trade sizes as I trade a somewhat larger account. So for clarification… I suggested trading no more than 1% of account size. Either 1% as SL or riskier 1% as trade size and calculate the SL as a percentage of account your willing to risk. But nowhere did I suggest a $2 a pip trade size on a $200 account. 
Hi everyone, I am an absolute newbie to forex, so this thread caught my eye because it is about money management.
The ammount of risk is determined by the SL that you use, which in turn will determine your trade size
Does this mean that the amount of leverage you use doesn’t matter as long as you’re using the right SL? For example, if I open a micro account with $1000 and decide to risk 2% of my account on each trade ($20 at the beginning), then I enter the first trade with a size of $100000 (leverage 100:1); value per pip=$10, SL=$20/$10=2 pips. This way if the market moves against me, I would lose 2 pips, which are only 2% of my account, even after I used a huge amont of leverage.
I would like to know if this is correct.
You need to be realistic about your stop loss. Theres no way you could set a SL of 2 pips (way too close to your trade). Most traders will run a SL of 10-50 pips dependant on the timeframe their trading, volatility, etc.
If you have a $1000 account you really shouldnt risk more than 1-2% of your account as a SL. Even a 1% of balance [B]trade[/B] ($10 - $1 a pip) is risky with a realistic stop loss.
I think leverage need to be clarified. Leverage has nothing to do with how much you will make or lose on a trade. It applies to the amount you need in your account to cover the trade or have the broker close it on you (margin call).
Since you guys are talking about 1% to 2% risk if your stop loss gets hit, then leverage is not even an issue. (Unless you are opening many trades at once). That’s when good leverage will “help” but actually, in my opinion, having high leverage will just help a noob burn his account sooner.
If you are using proper risk (1% to 4% let’s say) then we are talking about how much you will lose if you stop loss gets hit. So a $1,000 account would be 1$ per pip (one mini lot) with a 20 pip stop loss to risk 2% ($20).
pipsodent if you don’t have a clear understanding of how much money you are risking when you trade stay with the demo until you get it figured out.
Risk is the amount of money you will lose if your stop is hit. That amount is determined by number of lots you trade and how far your stop is from where you enter. Most people here recommend risk should be no more than 2% of your account balance. Experiment with your demo account until you see how this works. Money management is the most important thing a new trader must learn in my opinion.
Yes, that example was exaggerated, because as you said the SL is not realistic, but the idea behind it is correct, right? which is, if you set your SL appropriately, then the amount of leverage used shouldn’t be an issue in terms of the risk percentage you’re taking in the trade.
Thank you for your response.
I admire your spirit… but honestly the successful traders are risk adverse. Pro traders use 2X & 4X leverage for a reason. Retail traders use 100:1 but be careful. I have seen alot of rich quick guys who knew all the answers come and go here on BP. Trade conservatively and let compounding build your account. Best advise I can give. 
I already had the demo for a month Shr1k with a monthly gain of 5%. I have also had 2-3 margin calls so I know how it feels. It is a lot harder to recover when you are losing money. Say a loss of 50% means a recovery of 100% . In the demo account I risk 5% of the account per trade. That is very risky IMHO.
I will never ever let that happen again. Because my trading style is very conservative on real money. On a live account I will never ever enter a trade if it is in doubt. If I am not sure, then I will stay out. My target goal per day is only 1/4 of 1%. So for the $200 it is just 50 cents per day.
So instead of setting first your SL, and then your leverage according to the risk management, the right thing to do would be the opposite?
I think a more realistic example would be: Account size $1000 (trading microlots), risk 2%, leverage 4:1, so the trade size is $4000, value per pip $0.4, then the SL should be $20/$0.4 = 50 pips. thank you for your advice.
Two points here.
Point 1) A 2% loss on a trade with your own $1000 account is OK I suppose a 2% loss from a trade on a $48m account with other peoples money will get you fired out the door of any broker or bank. That hopefully explains why pro traders use leverage of 2X & 4X.
Point 2) In your post (post 11) you were way way way over any sensible Risk criteria.
Yes the generally accepted retail rule is 2% of account balance as a SL.
hehe im still here
and yes sound advice there as usual coach carter 
lee