Hi! Im new to this forum and I hope I will have a very good time! Thank you! : )
I have newbie question that I cant seem to find and anwser to in google.
If I have 1000 usd on my account and decide to open a trade with 1 lot ( just for the purpose of this example, I know it is over leveraged ) with a leverage of 1:100.
How much is 1 lot in USD. What I mean is, with leverage. How much do I tie up from my account in that one trade? is it 250 dollars? or 500 dollars? And of course this varies depending on the currency price etc. But just roughly, or if you can send me a formula or a calculator for this that would be much appreciated!
Thank you very much!
Best regards! Lukas
It depends on your a/c type.
So if you have micro account 1 lot will be 1k. If you have a mini account (possibly what you have) then 1 lot will be 10k. If you have a standard which seems to be the standard offer these days then 1 lot is 100k.
At a 1:100 leverage which is really 1% of your lot size then you would require a margin of
1% of 1k on micro
1% of 10k on a mini
1% of 100k on a standard.
I suggest you really do some reading and get this one right because this will determine what your first experience of currency trading will be like. Understand these very well you will realize that trading is not simply just buying and selling lots. Open the wrong lot you could see your capital go very faster and it will be impossible to maintain good money management.
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Thank you emeraldorc! for your reply! Much appreciated! : )
So if I have understood this correctly. Lot size is totally different depending on your account type? That sounds a bit weird to me. Let me explain.
I have had some experience with a broker called plus500. In their web trading program, it was their own. You could specify the amount you wanted to open a trade with currency. Not lot sizes. If I had a account of 1000 dollars in plus500 I could then open a trade at 50 dollars. It was very simply. Now what I did notice, was that the minimum amount, the micro lots, you could say, varied from pair to pair. Eur/Usd could be 4,32 dollars / 1000 units while Gbp/Jpy could be 5,21 dollars / 1000 units.
But from what I understand. 1 Lot is 100 000 units. But what I want to know is. If I open a trade with 1 lot. How much is that in dollars, just like it was in plus500, they converted the lot sizes into a visable amount of x dollars, this is how much 1000 units will cost you in order to open this trade.
So that is my question. How much does it cost me to open a trade with 1 lot. In lets say dollars. And Lets say Eur/Usd.
Thank you very much!
God bless!
Depends on the pair but if it is EURUSD then
1 lot = Volume: 0.14 mln USD
Pip profit = 10.00 USD per PIP
Exness has just given you the answer. It appears plus500 was automatically handling the exchange rate is USD for you hence the varying costs for lot sizes.
If you have a standard a/c then 100 contract lots of EUROS on a buy or inverse 100k USD buy (100k EURO sell) on a sell on that pair.
as all the pairs mentioned above are crosses (GBP/JPY) as a US dollar account, they do any conversions and this pair is quoted in JPY so this trade will be converted USD/JPY exchange rate. This is likely what is going on without looking into your numbers but in essence.
Don’t confuse pip value for crosses to be the same as USD quoted pairs e.g. if you are trading EUR/GBP then pips are quoted in GBP so essentially 1 pip on a 1 standard lot = 10GBP.
If you a still confused Baby pips has a pip calculator. It is imperative you understand that you are actually loaning 100k USD or whatever pair you are trading to make that trade and essentially paying a deposit (margin) as collateral so to not grasp this is like not grasping the price of the property you are buying and then requesting a mortgage and then paying a deposit. So give this a good work through before you start. The broker will only be too happy to take your money.
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Thank you Emeraldoc! I appreciate your answer. Let me just post 2 images from plus500 that will explain exactly what I mean. Im not so much interested in a pip calculator. I am more interested to know how much will be deducted from my equity when opening a trade with 1 lot on Eur/Usd. Now I understand that leverage has everything to do with this. Because lets say that I wanted to buy 1 lot on Euros. With no leverage I would have need 100 000 units of dollars? ( is that correct or euros ) But with leverage of 1:100 I only need 1 / 100 of that, meaning 100 units of the currency. So If I can buy euros for lets say 1,38 dollars. Opening a position of 1 lot would require me 1.38 dollar * 100 meaning 138 dollars on my account? Is that correctly translated.
Here are the two picture. The smaller one will show precisely what I mean. On it you can see that I have opened a order window with Eur/Usd and I have 100 000 units ( amount ) That in their calculator mean I need 4530 sek which is 692 dollars which makes my previous calculation wrong of 138 dollars to open up 1 lot position on Eur/Usd. But you can see my question in here. That is what I want to know. I want a calculator that tells me, that translates for me in whatever currency I want. The specific amount it takes for me to open up X specific lot sizes. example 50 000 units 25 000 units etc. Which would be 0.25 lots 0.5 lots etc.
Don’t use Plus500, they are criminals, I believe your money is already gone
