Difference between pip and pipette

[Lexzykool317]

In the case of setups that are based on pipette values,If say i buy at 1.19519 and I set my stop loss at 1.19319,will I say i used a stop loss of 200 pips or 2 pips?

[Drekieyja]

Neither, actually. It will be 20 pips.

‘Pips’ are the 4th number behind the decimal in non-Yen pairs. On Yen pairs, it is the second number behind the decimal.

[Lexzykool317]

Ok.thanks for the reply.

[anon81929759]

@Lexzykool317

Actually mate, it first depends on what instrument you are using

so… let’s say it’s EUR USD for arguments sake
if you enter at 1.19519
and you stop at 1.19319

MATHEMATICALLY the difference is 519 - 319 = 200

but mathematics assumes that the SMALLEST UNIT is the 9
so this answer is going to be incorrect

because A PIPPETTE is your smallest unit
but, you are trying to calculate in pips

10 Points / Pippettes = 1 Pip

it’s easier to write it like this

Entry 1.1951
Stop 1.1931

so Mathematically it would be like this 51 . 9 - 31 . 9 = 20 . 0
so basically 20 pips

or you can simplify it like this WHICH IS WHAT WE ALL DO

entry 1951
stop 1931
aka 20 pips difference

keep in mind when you measure it on your crosshair in MT-4 it will say 200
BECAUSE THE CROSSHAIR MEASURES IN POINTS

as @Drekieyja has already said
Currency is measured one way,
YEN (also a currency) is measured another way
indexes and crypto Measured another way

so… to get the correct answer we need to know what instrument you use
but, i’m going to assume you are using a 5 decimal place Major Currency Pair

Correct me if i’m wrong

hope this helps

[Lexzykool317]

"or you can simplify it like this WHICH IS WHAT WE ALL DO

entry 1951
stop 1931
aka 20 pips difference"

I think calculating this way is simpler and is what i will make use of.

My currency pair makes use of 5 decimal places as you assumed,yes.

Thanks a lot

[Lexzykool317]

I raised this as a different topic but diddnt get any reply.so please let me drop it here cos I need clarification.
It’s on how to use position size and what value to enter as volume when one wants to place a new order.

Let’s say these are the values I enter in the position size calculator if my account is a mini account ($10,000):
Account balance : 5000usd
Percentage risk: 1%
Stop loss: 200pips

The result using the calculator is this:
Amount at risk: 50usd
Position size(units)=2,500
Mini lot = 0.25

What I want to ask is this:
When i want to open a new order,where will I enter the position size value?
Secondly,what value will I enter as the volume? Is it 0.25, 2500 or 50usd ?

[anon81929759]

yeah, i saw that post

ok so… obviously your broker doesn’t deal in Lot sizes, but instead deals in Position or Contract sizes
i had a broker like this once… it pissed me off and i left
that… and the fact that they were very dishonest (long story)

anyway

what value to enter as volume

it depends on how your broker is setup as to what you enter
MT-4 will ask you to enter LOT SIZES
so… it’s handy to have a spreadsheet to work out what you need to enter

ok so
Your Account Balance is $5,000 USD - Cool
% Risk = 1%
ok, this means you are risking $50 USD

Stop Loss is at -200 Pips
ok, this means
$50 divided by 200 = COST PER PIP
therefore COST PER PIP = 0.25cents USD

now before i can answer what lot size this is… YOU NEED TO TELL ME WHAT CURRENCY PAIR YOU ARE USING

but if i was to assume that you are using a NON JPY, MAJOR PAIR like EUR USD
then it would be 0.01 lots = 10 cents per pip
so 25 cents = 0.025 Lots
but, you can only enter lots to 2 DECIMAL PLACES
so… you ROUND DOWN TO 0.02 LOTS

BUT REMEMBER THIS ALSO
You also need to factor in NOMINAL MARGIN for the trade
you can’t just say I’m trading “I’m risking $50 over 200 pips” No… because your margin
will reduce the amount of your balance
so… it will mean you are actually risking more than 1%

so calculate the margin first
then 1% of the remainder
then… of that amount (let’s call is X)
calculate X / 200
and go from there

does that help you understand it

[Lexzykool317]

I understood up to the point u said
Cost per pip = 0.25usd

I am using the EUR/USD pair

From my previous question I said let’s assume I am trading with a mini lot (=10,000usd)

How did u get ur value of the lot size as 0.01? And how did u get
0.01 lots = 10cents per pip?

When talking about nominal margin,which margin exactly are you referring to?is it the margin required (a.k.a margin level) or the usable margin (a.k.a free margin)?

But let’s assume that my account balance is 5000usd,and my usable (or free margin) is 4000usd, how do i calculate the nominal margin you talked about?

[anon81929759]

ok, so you HAVE UNDERSTOOD all of this… right ?

@anon81929759

Stop Loss is at -200 Pips
ok, this means
$50 divided by 200 = COST PER PIP
therefore COST PER PIP = 0.25cents USD

Now did you understand how i came to $0.25 USD
it shouldn’t be hard to figure out

basically 50 / 200 = 0.25

@Lexzykool317

I am using the EUR/USD pair

From my previous question I said let’s assume I am trading with a mini lot (=10,000usd)

How did u get ur value of the lot size as 0.01? And how did u get
0.01 lots = 10cents per pip?

ok, I NOW UNDERSTAND WHY YOU ARE HAVING PROBLEMS

YOU DON’T KNOW WHY 0.01 LOTS IS 10 CENTS… right ?

ok well there 2 ways to do this

THE QUICK AND EASY WAY

AND

THE MATHEMATICAL LONG DOING YOUR HEAD IN WAY

THE QUICK WAY IS
JUST ACCEPT THIS AS A FACT WHEN TRADING WITH EURUSD

0.01 LOTS = 10CENTS PER PIP
0.10 LOTS= $1 PER PIP
1.00 LOT = $10 PER PIP
10.00 LOTS = $100 PER PIP
100.00 LOTS = $1,000 PER PIP

AND SO ON

AND understand that you cannot place a trade any smaller than 0.01 Lots
and there is no such thing as 0.010 lots (meaning, you cannot go to the third decimal place

that’s the easy way

the hard way involves a lot of math that you honestly don’t want to go into and i believe will just confuse your further
so i won’t go into that now

but i will go to this level…

THESE ARE GIVEN AMOUNTS that are defined by the broker as the CONTRACT VALUE

(STANDARD LOT) 1.00 Lots = 100,000 Units of Currency
(MINI LOT) 0.10 Lots = 10,000 Units of Currency
(MICRO LOT) 0.01 Lots = 1,000 units of Currency

SO Why is 0.01 lots = 10 cents per pip
well… first look at 1.0 and let’s call this 100% Mathematically speaking

Next, What do we have to do to 1.0 to get it to 0.01
ANSWER
if we divide it by 100 we get 0.01 right ?

so if 1.0 = 100%
and 0.01 is 100 times less

then 100% / 100 = 1%

so we can say that a mini lot is 1% of a Standard Lot
we can say that a Micro Lot is 10% of a Standard Lot
and a standard lot is 100% of a Standard lot

make sense

so if a mini lot is 1% of a standard lot
and a standard lot = $10 per pip

then $10per pip / 100 = $ 0.10 cents per pip

THAT’S WHY do you get that now

you see, it’s just easier to accept it as a fact instead of doing your head in with the math.

NOW LET’S MOVE ON TO MARGIN

@Lexzykool317

When talking about nominal margin,which margin exactly are you referring to?is it the margin required (a.k.a margin level) or the usable margin (a.k.a free margin)?

But let’s assume that my account balance is 5000usd,and my usable (or free margin) is 4000usd, how do i calculate the nominal margin you talked about?

LETS DO THIS FIRST

@Lexzykool317

But let’s assume that my account balance is 5000usd,and my usable (or free margin) is 4000usd, how do i calculate the nominal margin you talked about?

No let’s not
because… You can’t do that
if your ACCOUNT BALANCE = $5,000 USD
you can’t just come out and say (Martin assume my free margin is $4,000 USD)

No… Your Account Balance is $5,000
and your FREE MARGIN is also $5,000

THIS IS WHERE YOU START FROM
THIS MEANS YOU HAVE NO TRADES ON

START HERE OK…

now
LET’S UNDERSTAND TYPES OF MARGINS

IN MT-4

You are going to have something like this in your terminal
this is a capture of a demo account that i’m playing with now
but, it’ll serve the purpose

so
YOU NOW PUT ON A TRADE
and you see

BALANCE
EQUITY
MARGIN
FREE MARGIN
MARGIN LEVEL%

and you will ask , Why is your BALANCE not moving
ANSWER : this is the Account balance where it was BEFORE YOU OPENED THE LAST TRADE.
It doesn’t move for every price movement

EQUITY = this is WHAT IS YOURS AT THIS POINT IN TIME
SO in this picture the last Account Balance was $760.50
then a trade was put on.
now that trade is at a loss
and IF I CLOSED THE TRADE NOW… MY NEW ACCOUNT BALANCE WOULD BE …$751.74
This number will always move based on how much you are winning or losing.
it represents WHAT IS YOURS IF YOU CLOSE NOW

now

Margin / Free Margin / Margin Level %

Margin is what IS REQUIRED FOR YOU TO OPEN A TRADE
SO in the case of this trade $60.51 was required to open the trade
(this figure is calculated on Lot size, Account Leverage, the Instrument you are using, the Exchange rate at the time and your local currency)
the point is… IT’S SORT OF A SECURITY DEPOSIT if you will

you get this MARGIN (NOMINAL MARGIN) Back when the trade closes

which brings us to
FREE MARGIN = this is what you actually are trading with
it’s money that is not tied up .

so if you had an ACCOUNT BALANCE OF $5,000
and the broker said that your NOMINAL MARGIN is $1,000
then your Free Margin would be $4,000

but if your broker said that your NOMINAL MARGIN was $50
then your FREE MARGIN would be $4950

When you calculate risk in a trade, REMEMBER TO CALCULATE IT AFTER FACTORING IN YOUR NOMINAL MARGIN

now
Margin Level%
this one is a bit fiddly to work out (and i do know the formula) but i don’t want to fill your head with crap
JUST UNDERSTAND IT LIKE THIS

its a percentage of your NOMINAL MARGIN

like this

if you have an Account Balance of $5,000
Your Nominal Margin is $500 for the trade
so Your FREE MARGIN is $4,500

Now lets assume you placed a trade of $10.0 Lots ($100 per pip)
and let’s say the trade moved against you 45 pips, hence using your $4,500 free MARGIN Completely

AT THIS POINT when

FREE MARGIN = $0
NOMINAL MARGIN / MARGIN = $500

MARGIN LEVEL % will = 100% (this is a very bad thing)

now for every movement into negative from here, YOU ARE USING UP YOUR NOMINAL MARGIN.

When your MARGIN LEVEL % gets to 80% YOU GET A MARGIN CALL from the broker
(meaning… Put More money in so you don’t blow your account)

if your MARGIN LEVEL % gets to 20%… GOOD BYE… GAME OVER

You see, When you start eating into your NOMINAL MARGIN you need to understand that you are eating into the margin that is the security deposit for the trade

to put it another way

if you are trading a micro lot (1,000 USD)
AND your account leverage is 1:100

Meaning for Every $100 of Currency , YOU PUT UP $1, the Broker puts up the Rest
so on $1,000, YOU PUT UP $10 NOMINAL MARGIN and the broker puts in $990

now if you eat away your free balance
YOU NOW START EATING INTO THAT $10

the broker then says… HANG ON… this is now getting risky because this stupid person is going to blow the security balance and their account

the broker therefore wants to get out so they don’t lose money
that’s why you get thrown out at 20%

so bottom line MARGIN LEVEL % is an expression (As a percentage) of HOW MANY TIMES MORE THAN YOUR NOMINAL MARGIN do you have as FREE MARGIN

get it
it’s HOW MANY TIMES BIGGER IS YOUR FREE MARGIN THAN YOUR NOMINAL MARGIN

so to answer your question
NOMINAL MARGIN IS MARGIN
FREE MARGIN is not Margin
FREE MARGIN is what you have to trade with the Usable margin if you will

so now back to this

@Lexzykool317

But let’s assume that my account balance is 5000usd,and my usable (or free margin) is 4000usd, how do i calculate the nominal margin you talked about?

if we assume you have $5,000 and there are no trades
Your Equity will be $5,000
Your Free Margin will be $5,000 as well

you now decide to open a trade

well now

it depends what the lot size will be
and what your account leverage is
and what the exchange rate is

and these things will contribute to the calculation of HOW MUCH NOMINAL MARGIN you are required to put in.
and after that is worked out
the Margin level % is then calculated based on that

[Lexzykool317]

Thanks a lot for the explanations.I understand it better now.but it has given rise to some other questions:

1. since my broker doesnt make use of position size,will i be making use of it any way when I want to trade or it’s only useful for those whose trading platform includes that?
   2)for the demo account I am practising with the volume size i can trade with are 0.01,0.02,0.03,0.04,0.05,1.00,2.00…,8.00
   Does this mean this is the contract value u referred to when u said
   0.01 lot (for example) is equal to 10cents per pip?

3)if I have $200 as capital, will it be advisable to trade a micro lot so as risk lesser or can i trade a mini lot?

4)if d leverage is 100:1,margin required is 1%.if the leverage is 50:1, margin required is 2%. What will be the margin required if the leverage is 10:1? I tried getting the value by doing cross multiplication but I didn’t get it right.

5. from the lessons in babypips,it was advised that newbies should trade with lower leverages,say 20:1 or preferably 10:1.if using a a leverage as low as that,won’t that mean that the trader is trading with more of his own money in each trade?

[Lexzykool317]

Also entered these values on the position size calculator

And I got this:

So i want to risk only $2 in a trade for a mini lot size,since my broker makes use of volume and not position size,will I enter the volume as 2 or 0.1?

[anon81929759]

Thanks a lot for the explanations.I understand it better now.but it has given rise to some other questions:

You’re Welcome

1. since my broker doesnt make use of position size,will i be making use of it any way when I want to trade or it’s only useful for those whose trading platform includes that?

when you are trading in MT-4 you will be using LOT SIZES
if you are trading on your brokers online platform , then maybe not

2)for the demo account I am practising with the volume size i can trade with are 0.01,0.02,0.03,0.04,0.05,1.00,2.00…,8.00
Does this mean this is the contract value u referred to when u said
0.01 lot (for example) is equal to 10cents per pip?

No… CONTRACT VALUE is how much money is in the trade
CONTRACT SIZE is the LOT SIZE

also. you can enter the amount manually , you don’t need to pick one from the list
Example, you can enter 0.08 if you like

but yes
0.01 = 10 cents per pip
0.05 = 50 cents
and so on

3)if I have $200 as capital, will it be advisable to trade a micro lot so as risk lesser or can i trade a mini lot?

Personally i would advise AGAINST trading with $200 to begin with
because
let’s say you use the min lot size of 0.01 10 cents per pip
let’s say you put down a stop loss of 40 pips so risking $4

but 1% of the total NOT COUNTING THE NOMINAL MARGIN is $2 risk
so, You’re already in a bad position

now to stay within the risk NOT COUNTING THE MARGIN
you would need to have a stop loss at 20 pips, which is pretty pointless in some cases

now LET’S ACCOUNT FOR MARGIN
so let’s say your NOMINAL MARGIN IS $50, which is really being forgiving
so now you really only have $150 to trade with, and 1% is $1.50
so now your down to a stop loss of 15 pips

my advice do not start with less than $1500
$1k minimum

4)if d leverage is 100:1,margin required is 1%.if the leverage is 50:1, margin required is 2%. What will be the margin required if the leverage is 10:1? I tried getting the value by doing cross multiplication but I didn’t get it right.

Margin doesn’t work like that
sometimes it does and sometimes it doesn’t
you need to go to your broker and ask how the margin is worked out for a specific instrument

that’s probably why you’re getting it wrong.

5. from the lessons in babypips,it was advised that newbies should trade with lower leverages,say 20:1 or preferably 10:1.if using a a leverage as low as that,won’t that mean that the trader is trading with more of his own money in each trade?

hehe
it was advised that newbies should trade with lower leverage huh
OK… well

Let’s look at both sides of the coin shall we

1. babypips has a legal responsibity to not say to people… GO OUT AND GET THE LARGEST MARGIN POSSIBLE
   thats why they said what they said, it’s a legal thing
   now. TO A POINT IT’S TRUE
   the point they were trying to convey TO NEWBIES is… Forex has high risk and Leverage amplifies that risk… THAT’S VERY TRUE

and yes the Lower your leverage, the More of your own money you are using
example 1:1 is not a leverage, here YOU USE ALL OF YOUR OWN MONEY
1:2 is the lowest leverage
it means you put in half and the broker puts in half

so let’s put numbers to this
if you are in a trade that is $10,000 Units of currency

you put in $5k as Nominal Margin on a 1:2 Leverage account
but, DO YOU HAVE $5000
No… so its a higher risk from that point if you did have it

so if you have say $1,000 in your account and your leverage is 1:1 you can only control $1000 worth of currency, but they won’t let you trade that small.

now look at 1:100 Leverage same trade $10,000 Units of currency
you would need to put in $100 as NOMINAL MARGIN
and yet YOU STILL GET TO CONTROL $10,000 Units of currency
Meaning, you get to trade a larger lot size so you can earn more money

meaning… if you put in $100 from your $1,000 in your account
you have $900 as free balance
now if you are risking 1% of your account , you can risk $9
and if you have a stop loss at 30 pips you are using 30 cents per pip
so YOU TRADE A LOT SIZE OF 0.03 LOTS… REMEMBER THAT… ok

now same trade
but… 1:500 leverage
same account balance
this time you only need to put in $20
Meaning you have $980 to trade with
meaning… NOW… WATCH HOW THE LOT SIZE IS DIFFERENT
same stop loss… 30 pips
same risk 1% x 980 = $9.80

now watch how the lot size changes
as opposed to 0.03 lots (meaning you make 30 cents per pip) if you win

the lot size is 33 cents per pip meaning 0.033
NOW. YOU CAN’T PLACE A TRADE OF 0.033
but THIS PROVES A POINT ANYWAY

USING HIGHER LEVERAGE MEANS…

1. You control more currency, which means you can trade a larger lot size, which means MORE MONEY PER PIP

2. Now it also means LOWER NOMINAL MARGIN PER TRADE

3. now this is all good and fair UNTIL YOU UNDERSTAND THAT… IT ONLY WORKS IF YOU KNOW HOW TO MANAGE YOUR MONEY AND YOUR RISK
   because if you don’t, YOU’LL BLOW OUT YOUR ACCOUNT AND LOSE EVERYTHING

but Assuming you do do it correctly
YOU CONTROL MORE CURRENCY WITH A LARGER LEVERAGE ON YOUR ACCOUNT

try it on demo
open 2 demo’s
1 with leverage of 1:10
second one with leverage of 1:500 or higher

open both accounts with $1,000
you’ll notice at times on the 1:10 you won’t be able to place a trade of a certain lot size
but YOU’LL BE ABLE TO PLACE IT ON THE OTHER ONE
this is the point

you get to control more currency and make more money than you normally would be able to do
THAT’S WHAT THE PURPOSE OF LEVERAGE IS

[Lexzykool317]

when you are trading in MT-4 you will be using LOT SIZES
if you are trading on your brokers online platform , then maybe not

Is there more advantage trading in mt4 platform to trading on my broker’s platform?
But if say i use mt4 platform and I want to make a deposit or withdrawal,what will the process be like? How will my broker help me do such transactions if i use mt4 platform because I thought if i trade on my broker’s platform direct,I won’t have issues with such transactions

[Lexzykool317]

@anon81929759

… CONTRACT VALUE is how much money is in the trade
CONTRACT SIZE is the LOT SIZE

also. you can enter the amount manually , you don’t need to pick one from the list

If it’s volume my broker deals with and not position size,does it mean that if my balance is $200 and I key in 1.00 as the volume,does it mean it’s only $1 that I will use for the trade or how is volume calculated with respect to the contract value?

@anon81929759

if you put in $100 from your $1,000 in your account
you have $900 as free balance
now if you are risking 1% of your account , you can risk $9
and if you have a stop loss at 30 pips you are using 30 cents per pip
so YOU TRADE A LOT SIZE OF 0.03 LOTS… REMEMBER THAT… ok

I didn’t really get the calculation of how the lot size ur 0.03. A micro lot
0.01=10cents per pip.
I keyed in these values on the position size calculator and I got this:

How is the lot size 0.03 in your own calculation and not 3 as shown in the images attached?

@anon81929759

now same trade
but… 1:500 leverage
same account balance
this time you only need to put in $20
Meaning you have $980 to trade with

For 1:100 the margin you used is 1% .what value did you use as Margin for 1:500 to get these values?

[anon81929759]

Is there more advantage trading in mt4 platform to trading on my broker’s platform?
But if say i use mt4 platform and I want to make a deposit or withdrawal,what will the process be like? How will my broker help me do such transactions if i use mt4 platform because I thought if i trade on my broker’s platform direct,I won’t have issues with such transactions

hehe
Yes there is an advantage to trading off MT-4 IT’S EASIER and more user friendly

Your broker doesn’t help you make transactions , YOU DO THAT
Deposits and withrawing are done through your online client area or whatever they call it
you do that stuff via the online interface
you trade off MT-4 or C-Trader whichever you prefer

[anon81929759]

f it’s volume my broker deals with and not position size,does it mean that if my balance is $200 and I key in 1.00 as the volume,does it mean it’s only $1 that I will use for the trade or how is volume calculated with respect to the contract value?

HELL NO
1.00 Lot size = $10 PER PIP
Not $1 in the whole trade

Mate
$1,00
and
1.00
ARE NOT THE SAME THING

it’s like saying
$1.00
and
1.00 Kg
ARE NOT THE SAME THING

$1.00 (THIS IS A MEASURE OF CURRENCY)
1.00 LOTS (THIS IS A MEASURE OF LOT SIZE)

1.00 (1 STANDARD LOT) Means you are consuming or making $10 per pip
so… if the trade runs against you by 50 pips YOU WILL MAKE $500
IF IT GOES THE WRONG WAY… YOU LOSE $500

Not $1[quote=“Lexzykool317, post:14, topic:129608”]
if you put in $100 from your $1,000 in your account
you have $900 as free balance
now if you are risking 1% of your account , you can risk $9
and if you have a stop loss at 30 pips you are using 30 cents per pip
so YOU TRADE A LOT SIZE OF 0.03 LOTS… REMEMBER THAT… ok

I didn’t really get the calculation of how the lot size ur 0.03. A micro lot
0.01=10cents per pip.
I keyed in these values on the position size calculator and I got this:
[/quote]

ok
well let’s do it STEP BY STEP

did you understand this…

if you put in $100 from your $1,000 in your account
you have $900 as free balance

if not tell me

Now. did you understand this… that you are risking 1% of what is remaining
because 1% x 900 = 9

now if you are risking 1% of your account , you can risk $9

if not … tell me

Now. UNDERSTAND $9 IS THE TOTAL AMOUNT YOU HAVE TO PLAY WITH IN THAT TRADE
so…

if you have a stop loss at 30 pips you are using 30 cents per pip

it’s like this
$9 divided by 30 pips = 0.30 Meaning 30 cents Per pip

NOw, you convert that to lots and it’s 0.03 lots
because 0.01 lots = 10cents per pip
so 0.01 x 3 = 0.03 Lots or 30 cents per pip

[quote=“Lexzykool317, post:14, topic:129608”]
I keyed in these values on the position size calculator and I got this:

LOL

BECAUSE YOUR BROKER IS NOT TAKING INTO ACCOUNT THE MARGIN

LOOK…

THIS IS WHAT YOUR BROKER IS DOING
You entered
ACCOUNT CURRENCY = USD
ACCOUNT BALANCE = $900
RISK PERCENTAGE = 1%
STOP LOSS (PIPS) AS CHOSEN BY YOU = 30 PIPS
CURRENCY PAIR = EUR USD

so your broker does a stupid little calculation like this

risk percentage x Account Balance = Amount at Risk
so…
0.01 (1% ) x 900 = $9 USD

Now if you trade this, You are going to realize when you open a trade that THIS IS NOT TRUE
because they have not factored in NOMINAL MARGIN into the calculation

the way i do it is

Account Balance - Nomainal Margin = What you are really left with
then

Risk Percentage x What you are really left with = Amount at risk
see the difference

THEN WHEN YOU LOSE and you ask your broker
and FEEL FREE TO GO ON CHAT AND ASK THE BROKER WHY THEY HAVE NOT CALCULATED NOMINAL MARGIN
because a trade is not just made up of Risk Percentage
there is a Nominal Margin involved as well

so ASK THEM "WHY DOES THE CALCULATOR NOT FACTOR IN NOMINAL MARGIN"
see what they say

and you’ll find that you’ll get some BS excuse as to why it’s your responsibility to know this
and YOU’LL FIND YOU’LL GET THAT EXCUSE AFTER YOU LOSE YOUR MONEY.

For 1:100 the margin you used is 1% .what value did you use as Margin for 1:500 to get these values?

No…
1% is not a Margin
Nomainal Margin is Measured in $$$

[Lexzykool317]

@anon81929759

Yes there is an advantage to trading off MT-4 IT’S EASIER and more user friendly

Can you explain how it’s easier and more user friendly please?
If you don’t have to make transactions through a broker,what is their role in forex trade? I thought some of the things to consider when choosing a broker is a broker that charges less on commission,pip spread etc. I thought of you trade on the platform of a broker that charges less,you will make more profit and pay less for charges.

If i do the trade off MT4 direct, how will the payment for charges attached to trades be charged and paid for?

Also, the plaform I have is the platform from a broker(alpari mt4).I downlaoded mt4 platform yesterday that is not attached to any broker but it was very similar to the alpari mt4 platform.I still saw these same features :

My main concern is the volume feature. I thought I will see position size but I did not.

Can you give me the link I can use to download the General mt4 platform that makes use of position size please?

@anon81929759

$1,00
and
1.00
ARE NOT THE SAME THING

You didn’t really get me.What shows in the VOLUME option on my mt4 platform is 1.00 and when I use my mobile mt4 app to check it, it shows as $1.00. I didn’t say $1,00.
So from these, if volume is what is used to trade and not position size,how do i determine my position size and does it mean it’s $1.00 I used for the trade (based on the use of volume to trade?)

You didn’t really get me.What shows in the VOLUME option on my mt4 platform is 1.00 and when I use my mobile mt4 app to check it, it shows as $1.00. I didn’t say $1,00.
So from these, if volume is what is used to trade and not position size,how do i determine my position size and does it mean it’s $1.00 I used for the trade (based on the use of volume to trade?)

@anon81929759

Now. did you understand this… that you are risking 1% of what is remaining
because 1% x 900 = 9

I understood the calculation of how it is $9 I can risk.thanks

@anon81929759

$9 divided by 30 pips = 0.30 Meaning 30 cents Per pip

NOw, you convert that to lots and it’s 0.03 lots
because 0.01 lots = 10cents per pip
so 0.01 x 3 = 0.03 Lots or 30 cents per pip

I understood how you got all these values in your calculation but when I calculated
$9 divided by 30 is 0.3 and not 0.30
Are they the same or did you use 0.30 because 1 decimal place can’t be used for the calculation?

@anon81929759

Account Balance - Nomainal Margin = What you are really left with
then

Ok.but on the platform I use, when I log in and I don’t have any open trade,the only values that show are: balance,equity and free (or usable) margin.nominal margin doesn’t show.so how will i know what my nominal margin is?since my platform doesn’t make use of position size but volume?

[Lexzykool317]

From your own point of view you advice that someone should open an account when he has at least up to $1000 to be able to trade for large not sizes and use less of one’s money with a higher leverage
But If say someone doesn’t have up to that or someone doesn’t want to risk that much,can’t I say use $200 for example and open a micro account and limit my trade to a micro lot and use leverage to trade for the micro lot position ofn $1000,and not aim to trade for large positons like the standard lot of $100,000 which would be risking too much which such small amount?

[anon98339083]

can’t I say use $200 for example and open a micro account and limit my trade to a micro lot and use leverage to trade for the micro lot position ofn $1000,and not aim to trade for large positons like the standard lot of $100,000 which would be risking too much which such small amount?

Yes, of course you can, and in principle that would be a very sensible and good approach.

But there are two other things you need to know:-

1. The purpose of trading with a $200 account isn’t to make money: it’s to gain experience. (Even if and when you get as far as joining the very tiny minority of forex traders who can make a steady 5% per month on their accounts, that’s still only going to be $10 per month, so it’s not exactly a money-making opportunity!)

2. Depending on your trading style, $200 may not even really be enough to trade a micro-lot safely. (If you were trading EUR/USD with a 20-pip stop-loss, it would just about be ok, because your risk per trade would be 1% of your capital, but if trading with wider stop-losses than 20 pips, your risk would exceed that and $200 wouldn’t be quite enough.)

[anon81929759]

as laughing charlie already said
yes you can, but you shouldn’t

i would also like to add
if you don’t have $1,000 AS A MINIMUM, you should not be trading forex to begin with.