If you had a pip for every time someone asked this question

Beginner Questions
1

…you would have quite a few pips :wink:

Hi all,

Hope all is well in ForexLand.

My forex journey is about 4-5months old at the moment. I have spent the last number of months reading posts and books/watching charts/dreaming of Fibonacci etc. These have taken up my main focus as I try to familiarise myself with and become comfortable with this whole subject.

Today I have a common question which I hope someone would assist me with.

It is the age old question of lot size, risk quantity etc. For what it is worth I have read the school section, I have searched it here in the forums and I have read as much as I could find about it.

The problem is I just dont get it and how it applies to me in practise…I plan to open an account with 1-2k euro in the near future and I just cant figure out how to apply the money. I am aware of the max of 2% which should be used per trade but I am not sure what this emans in terms of lot size, quantity etc. I basically need a guide of how I should work with the balance in my account

I know this will frustrate people to hear this question again but I would appreciate an answer/example. Please let me assure you I am not being lazy and looking for someone to do the work for me. I just wanted someone to put it in a way that I can process.

Thanks in advance,

Padraic

2

Here’s a basic formula:

Lots = (Account size x % risked) / (pips to be risk x pip value)

Where pip value is determined by the type of lot you’re looking to use. For example the pip value of a mini lot of EUR/USD is $1.00.

3

Low risk = longer time learning the game.

Test out your strategy using high/low and medium risk models and you’ll see why it’s important.