Is that a BUG in MT4 or I am the BUG?

Beginner Questions
1

Assume I have 100,000USD in my demo account in MT4, I have some calculation problem in placing order.
Assume my margin is 1:1

GBP/USD = 1.63020
Then I calculate how much I can buy:
100,000/1.63020=61342

Since lot size is 100,000
So I can only buy lot size 0.6
So in this trade, I used 97812USD to buy which is valid to the information in the order terminal in MT4

The margin shown in the order terminal is 97812

BUT if I trade with EUR/USD

EUR/USD = 1.49139
Then I see how much I can buy:
100,000/1.49139=67064

So I can only buy lot size 0.6
So in this trade, I expected I used 89483 to buy but in the order terminal, I only used 60000USD? WHY???
IS there any wrong concept or calculation problem? How do you calculate when placing order?

2

That’s because you buy USD denominated lots, meaning that 0.6 lot size corresponds to a 60.000$ position, which is worth 40.230€. Ergo, you have in fact not bought as much as you could with a 1:1 leverage.

If your balance is 100.000USD and you want to apply 1:1 leverage, then you can basically always buy 1 lot as that corresponds to a 100.000$ position value, this goes for pairs where USD is the quote currency.

It’s when you run into pairs where USD isn’t the quote currency, for instance USDJPY or GBPJPY requires a bit more thinking and math.

Did that help or confuse?

3

Thanks…but I am still confuse… So can you tell me how can you calculated how much can I buy (max) for GBP/USD and EUR/USD, if you show the calculation, I probably can see a clearer picture… The thing I dont understand is that why I can buy 1 lot of EUR/USD while I cant in GBP/USD, both exchange rate are pretty close and both are indirect quote and base currency isnt USD, so I suppose their calculation method is the same? But it seems to me that it isnt? Can you further explain? I have been search for help in the web, but none of them can really answer my question… THANKSSSSSSS

Why 1 lot of EUR/USD only needs 100000USD? But not ~148900USD ?
It happens in GBP/USD but not in EUR/USD in MT4 in demo account? Both quote currency is USD…

4

If your account holds 100.000$, 1:1 leverage, then you should be able to buy 1 lot of either EURUSD or GBPUSD, just like you say.

There should be no difference between these two pairs. Maybe it has something to do with your brokers margin requirement being different for the two pairs or something? I haven’t got an answer for you, sorry.

edit: are you sure that your account currency is in USD?

5

in my case, I can only maximum buy 0.6 lot of GBP/USD but I can buy 1 lot of EUR/USD…perhaps its a bug in the demo account? I downloaded in metatrader4.com and fxcm.com, both have the same problem, probably u can try it out on monday in your demo account to see if u have the same problem?
By the way, I added you in skype and msn, hope you dont mind!

james

6

Yes, I’ll try to check that out on Monday.

7

and i heard someoen said that:

EURUSD, GBPUSD, AUDUSD are direct quote, meaning 1 lot=1 lot EUR, GBP, AUD

USDJPY, USDCHF, USDHKD are indirect quote, 1 lot=1 lot USD

anyway, help me check it out the demo account on monday~

TACk

8

That’s probably the logical answer!

I should have thought of that!

Not much help you got to say Tack for… but varsågod anyway :o

9

Hey, how was it? Do you the same problem in the DEMO account?

10

No, I just tested it now.

Opened a 1:1 leverage demo on FXCM MT4 and bought 100.000 EURUSD. No problem there.

11

YES exactly, and thats the problem I am having, if we have 100 000USD, how can we buy 1 lot of EUR? it cost more than that! suppose you need around 149 000USD in order to transact successfully!

What about GBP/USD? You cannot buy 1 lot of it if you only have 100 00USD? So why?

could we possible talk in skype?

12

No headset :slight_smile:

I just tested with GBPUSD and you’re right. You can’t trade as big positions on that pair as you can on EURUSD.

Why do you want to trade with 1:1 leverage anyway? Leverage is sort of the point in forex.

13

Im using 1:1 because i just want to make the question more simple… but why cant I buy one lot of GBP/USD but I can buy one lot of EUR/USD?

Is that I made any mistake or its the software bug?
Cuz if I have 100 000USD, I can only buy 0.6 lot of EUR/USD, but why it turned out that you can buy one lot? Is that a bug for EUR/USD?

thanksss

14

I’ve had a look at the issue.

Buying 1 lot of EURUSD means that the lot is worth 100.000 €

Buying 1 lot of GBPUSD means that the lot is worth 100.000£

Buying 1 lot of USDJPY means that the lot is worth 100.000$

If we can buy 1 lot of EURUSD, that clearly must mean that we have at least an amount in our account, in whatever currency, that corresponds to 100.000€

Knowing this, I started another demo with 100.000$ and tested again.
Either I’m not as smart as I’d like to be or you’ve actually found a bug in MT4.

For other currencies it works just like it should, but not with EURUSD. It behaves as if the pair was USDEUR instead of EURUSD.
It shouldn’t be possible to trade 1 lot EURUSD with an account balance of 100.000$, but it is!

I don’t know what’s going on with this and I can’t explain it any more than you can.

15

yes, exactly, that’s exactly what I am talking about:), but does it behave the same in the REAL LIVE account or just the demo account only?

16

I don’t know. I use more leverage there, plus I don’t want to pay spreads just to find out…

You could chat or email your broker of choice and ask if they’re aware of this strangeness, and if so, if it only affects demos.

Who knows, maybe you’ll get a logical explanation that will make us both feel like idiots :smiley: