Does leverage affect the lot size one can use to trade?
Say for example I want to use leverage of 1:2000 and have 20 USD what lot size should I be trading? also how much per pip will I be getting on this set up?
Sorry that was a typo,I meant 200usd account
Hey,
I hope those are only example numbers. I’ve never heard of 1:2000 leverage and maybe you should have a bit more than only 20USD in your account. But both of it doesn’t matter at the end, the most important thing is your risk management!
Your leverage is the other side of the coin of your margin requirement. Meaning if you have a 1:2000 leverage, your margin requirement is 0,05% (1 divided by 2000). So 0,05% of your 20 USD = 1 cent would be locked up as security margin for you to stay in that trade.
To answer the other part of your question:
You should always determine your lot size like this:
set your stop loss and see how many pips that are → decide how many % you want to risk of your total account size (ex. 0,5% of 20 USD = 10ct) → then you can calculate your lot size or better position size.
babypips even have their own position size calculator:
I calculated the above example with a 10 pip stop loss and your position size in that case would be 0,1 micro lots. Micro Lots are already the smallest lot size and you would only be able to risk a fraction of that = this doesn’t work in praxis.
This does not mean you should increase the amount you want to risk from your account balance just to be able to enter your trade and your stop loss needs to be where your stop loss needs to be! It means you need a bigger account size than 20 USD.
Another thing, if you were able to trade with those 20 USD and risk 10ct, your profit would be 20ct on a 1:2 trade, which doesn’t seem like a lot. Again, this is not a place to get greedy and decide to risk more! If you only have a small account size your wins are going to be small as well and that is okay and correct. It’s called risk management.
If you want to increase your profits, you should rather get a bigger trading balance than increasing your risk % of manipulating your stop loss size.
I hope you were able to follow my post and if you have any questions feel free to ask.
I’ve also answered questions in the past about leverage on this forum. Maybe you’ll be able to find those posts too, if you go to my profil or search up my posts some other way 
By definition, leverage allows you to trade a bigger position than you normally could. This means you’d be able to trade more lots.
the general (and very wise) rule of thumb is that you should have a minimum of $250 - $300 in the account to trade 1 microlot (0.01 lots)
it doesn’t really have anything to do with what leverage you have
(but 1:2,000 leverage would be crazy anyway, and no properly regulated broker is allowed to offer that leverage, and for good reasons)
Yes, leverage does affect the lot size one can use to trade. The lot size is determined by the leverage ratio and the available capital.
Only technically.
Yes, it’s true that it does.
But in practice if it’s really relevant to someone, they’ve gone so wrong in their understanding of what they’re doing that they shouldn’t be trading anyway.
A question about “1:2,000 leverage with a $20 account” is rather questionable anyway?
It has nothing to do with trading at all!
Leverage 100-200:1
Lot size 0.05
Account size $500.
Which means $100 account size to 0.01 lot size…
Then you open a trade with a 200 price action movement both ways for aT/P & S/L
Then use the chart to move the T/P up and down to where you think the price action would move on your chart TF ATR and counter that with the S/L opposite - providing it is within your risk management per trade.
I hope that helps, if you can understand my approach.
In other words focus on where your profit is likely to move.
Kindly check FBS they offer that kind of leverage as well as 1:3000 although I don’t know if at all it’s working.
It was a typo not 20 but 200 usd
Yes because leverage allows traders to take more position than his ability according to his capital sizing.
I have come to learn that focusing on where the profit is likely to be is important when considering leverage. Leverage by default has an effect on the lot size for your trade. But key to consider capital even though it allows traders to take positions larger than normal.
Hey I’m a new trader myself but I use copy tradings a lot, I have a leverage of 1:500 and capital of 2600pounds, my question is with a leverage that high that could pose a risk. if I kept my lot sizes to 0.01 would leverage matter at that point or does it still play a factor on how much money is being put in. For example if I had a leverage of 1:5 and still bought lot sizes of 0.01 would my profit still be similar to what I usually see. Basically asking if more leverage increases money put in but with the same lot size. I understand what leverage does and means I just don’t know if it plays a factor with risk if I kept my lot sizes low I don’t want to burn out to quick
Leverage will reduce the required margin per trade.
Yes, leverage affects the lot size. You can trade larger positions, but it’s risky.