Hi guys I plan on opening a micro account with oanda i just don’t understand how leverage will work in a micro account. Can someone just explain how you would make any money with a micro. I know it’s a smaller account and your not gonna get rich.
hi there:
i just wanted to say that if you don’t understand leverage and margin trading, then DO NOT OPEN A LIVE ACCOUNT. try some free practice accounts FIRST. if you want soooo much to lose your money then please give it to me or to any1 that is in need ( i guess there are plenty on the streeets).
really…go through pips school first, practice for some time…
tomorrow is another day and you will still be able to make a million bucks in a week.
Leverage is a highly misunderstood concept and I agree with Disaster you must fully read about and understand this and all other aspects of trade management before you do anything else. Leverage is no different on a small account as on a large account, the issue is do you still trade to a level that ensures that you can withstand (financially and psychologically) the drawdowns of your approach
how do i find a good carry trade pair?
Thank you guys for the reality check, I now understand why the title of that part of the baby pips course is College: The Number One Cause of Death for Forex Traders. I really now see why so much of us fail, it’s not that our systems are bad or that we are bad traders. It’s all because of under capitalization, I have made a vow to my self to read that part of baby pips atleast once a day and make sure it sticks in my head forever. Thank you guys for the priceless advice.
I think that I might have the same question here. Reading this out of the fxcm starter package I need clarification on something.
[B]If you think that the Euro will rise relative to the U.S. Dollar you would buy one lot of the EUR/USD currency pair.
The EUR/USD is trading at 1.2553 when you buy it.
The EUR/USD is trading at 1.2674 when you sell it.
You bought at 1.2553 and sold at 1.2674 for a profit of .0121 or 121 pips.
Each pip is worth $10 in the 100K account.
121 pips x $10 = $1,210 profit
[/B]
My question is what is 100K account? Would it be correct to say that the pip value of a mini account would be $1 and the pip value of a micro account would be 1 cent?
To naswer your question:
first of all IF you found this informationon your brokers page…i can tell you it IS missleading. A 100k account is an account with 100.000$ of margin ( this means that you deposited 100.000 dollars-and they are ready for you to play with).
The profit calculated as you stated is NOT dependat on the fact that you have 100k account. It is the nuber of units that you buy that defines HOW MUCH you make per PIP. Additionally, with a 100K account , depending on the LEVERAGE that you have, you can buy less or more units ( giving the same position value).
So, considerign a good trade habit ( risk 1 or 2% of your account ) you should really be trading positions that have a value of around 1000 or 2000 $. That means that you can make 0,1 or 0,2 per pip.
Again: it is not the name of the account ( 100K, micro, mini, ultra ligh, super green, easy money, etc.) that defines how much a pip is worth, and how much profits you book. The name ONLY means how much money have you paid to FUND you account.
hope this helps a little.
GL M8
Some brokers have muddied the waters a little bit with this
question & use all sorts of different names for what is really
quite simple.
1 standard lot = 100 000 units, pip value for USD pairs $10 (different
for crosses)
therefore from this all the different lot sizes can be determined.
1 mini lot = 10 000 units (1 tenth of a lot), pip value (USD pairs 1 tenth)
$1
1 micro lot = 1 000 units (1 hundreth of a lot) pip value (USD pair) 10 cents.
et al.
Also the pip value gets skewed when using cross pairs where the USD is not
the base currency, but it is all the same math.
If you open up an Oanda demo account, look in the market order this
uses units only, no mention of lots, so much easier.