Hi everyone!
I have finished all the lessons in the School of pipsology and demo trading at the moment.
Now, I am facing a major hurdle when it comes to placing trades “based on lot sizes” in MT4/MT5. But before I get to that, let me just stress that I do understand that 1 standard lot is equal to 100,000 units of a currency pair, 1 mini lot is 10,000 units and 1 micro lot is 1000 units and the value of a single pip in these lots are $10.00, $1.00 and $0.10 cents respectively.
If I were to place a trade on any of these lots in MT4/MT5, I would enter 1.00, 0.10 or 0.01 in the volume field.
As per the lesson here on how to set orders in MT4: (MT4 Basics: How to Set Orders - BabyPips.com) If I wish to buy/sell 5000 units of a currency pair then I would enter 0.05 into the volume field and each pip in this trade would be equivalent to 50 cents.
All this is straightforward.
Now here is (what I think is) the problem:
When I open up a trade to buy/sell a micro lot., I enter 0.01 in the volume field. Now, given 1 pip is worth $0.10 or 10 cents, I would expect that every pip gained or lost would be counted in multiples of 10 cents. For example if I gained 100 pips, I would expect that my gain would be $10.00 (100 pips x $0.10) which would be added to my balance once I close. However, it appears that I have actually gained $1.00
The same thing happens if I try to trade 1 mini lot. I enter 0.10 in MT4 and expect that 1 pip is worth $1.00. Instead every pip gained/lost, is counted as $0.10 and not $1.00.
I don’t need to explain what happens when I try to trade 1 standard lot. I’m sure you get the picture.
This is really confusing for me. Can someone please explain what is wrong here? Maybe something I missed or my math is wrong?
Refer to screenshot attached
Appreciate your feedback.
