Hi,
can anyone please help. I would like to start trading with £6000 GBP. I would like to risk only 1% of my account per trade, can you tell me how I go about doing this? do I use 1:100 leverage and only buy 1 lot? thanks alot.
I can’t answer for all, but personally I use one nano lot for every 100 dollars in the account. So for every $1,000 I’m trading $0.10 pips. I use large stops, and I have multiple trades going on at once without fear of overextending myself.
Ten cent pips you say? How is that effective? I routinely add 5% a week to an account… You’ll be amazed at how fast “slow and steady” adds up.
It’s ALL in the compounding;)
Simple answer to a simple question.How many points do you need for a stoploss if it is say 40 points on any trade.One percent of 6000 is 60 so no more than 1.5 per point at risk in this example.
First, when you say, “do i use 1:100 leverage?” I think you are referring to the maximum leverage your broker is offering you, and not the leverage you are using in the trade.
When you say “buy only 1 lot”?
lots come in different sizes:
1 standard lot contract = 100,000 units
1 mini lot contract = 10,000 units
1 micro lot contract = 1000 units
1 unit
You now have to decide either the lot size(number of units) or the amount of pips you are willing to lose.
The second figure can be worked out afterward.
Heres a simple calculator that may help you:
Position Size Calculator: Free Online Forex Position Sizing Calculator
Here is a second calculator that will figure out pip values for you.
Pip Calculator: Free Online Forex Pips Calculation Tool for Traders
hope this helps
ignore leverage. multiply value of one pip times stop loss distance and that’s how much you are risking. You ARE using a stop loss right?
I wouldn’t start with the whole 6000. Why not start with 1000, and then if you can prove to yourself that you can make money consistently, add the other 5000. Having the freedom to fail will help you approach your losses from a constructive point of view, rather than with fear&panic!
Hello, Steve
Here are the steps you should follow:
Select the currency pair you want to trade.
Determine the pip-value for this pair (see the example below, and the note at the bottom of this post).
Determine the stop-loss that is appropriate for your trade.
Use the following formula to determine your position size (how many lots to trade).
[B]Number of Lots = [(Account Balance, in £) x (Risk %)] / [(Stop Loss, in pips) x (Pip Value, in £)][/B]
Here’s an example:
Let’s say that you have a £-denominated account, your account balance is £6000, you want to trade mini-lots of GBP/USD, you want to risk no more than 1% of your account on this trade, and you have determined that you need a 45-pip stop-loss.
How many mini-lots can you trade, without exceeding your 1% risk criterion?
The value of 1 pip will vary with the price of the GBP/USD. Let’s say that the GBP/USD is 1.5800. That price corresponds to a pip-value of £0.6329 per pip, for mini-lots.
Enter your account balance, your maximum allowable risk, your stop-loss, and pip-value into the formula:
Number of Lots = [(Account Balance, in £) x (Risk %)] / [(Stop Loss, in pips) x (Pip Value, in £)]
Number of Lots = [£6000 x 0.01] / [45 pips x £0.6329 / pip]
= 60 / 28.48
= 2.1 mini-lots, which you will round down to [B]2 mini-lots[/B].
[B]A note regarding pip-values:[/B] Many trading platforms calculate pip-values for all the pairs available to you. Be sure that you know the lot-size (nano, micro, mini, or standard) that these pip-values are based on, because the formula (above) will give results based on that same lot-size.
Some platforms are configured for trading in [B]units[/B] of base-currency, rather than lots. Such a platform may give you a [B]pip-value per unit of base-currency[/B]. In that case, the formula (above) will tell you how many [B]units[/B] of base-currency you can trade, within the risk parameter you have specified.
I hope that helps.
to be honest. If you are asking this question then you should not be trading real money. unless 6k is just spare pocket change. You should already have a solid trading plan that works and have the answer to every question that you have before you trade with real money.
Yeah men finish school section thrice or print it and delve deep into the math section at the beginning till you can do the calculation offhead and still you’ll
only be half ready. Do not demo for long, and dont stake the whole amount as said. With the above formula I have some table for a $-denominated account, once you can work out the pound equivalent for it then you will be set in the required math.
ps; table wont upload now will pin it up laterz when bands align
actually my query is if
type:sell size:3.00 symbol: euro/usd price:1.33118 t/p:1.33236 profit:309 pips???:mad: please help me to calculate r convert that profit 309 to pips.
actual how much pips has been earned??? acc:2000$
1.33236
-1.33118
.00118
Ignore the 5th decimal. It’s a pipette.
So, 10.6 pips profit on each position on 3 mini lots.
Sounds as if there may be a commision charge to give you the 10.3 pips.
If you want, you could try to participate in a PAMM account, thus not being an active trader you could get some positive results.
what is a PAMM account ?
It means that the experienced trader makes a public offer to investors and they may invest their funds on condition of financial results distribution between trader and investors.
I still can not give you links to show you more as I am new here at forum.