Hi guys… i have a question about leverage.
The way you change leverage is by changing the size of the lot you buy (or sell) every time you place an order? (0.1k, 0.2k or 1k, 2k…etc)
No, leverage allows you to buy more with less money. It’s like using borrowed money so you can buy larger positions, therefore you can make more money, but you can also lose more money.
Hi,
From what I understand, Leverage changes the value of the pip and Volume, or lots, is the quantity ie number of $10,000 mini lots or $100,000 standard lots within 1 order…so placing one 0.2 order is the same as placing 2 separate mini lot orders, and one 2.0 is the same as placing 2 separate standard lot orders.
Here’s a bit more info on how leverage affects the pip value How does leverage affect pip value?
Hope that helps
Leverage most certainly DOES NOT having anything to do with pip values.
Pip values are a function of position size, the pair being traded, and in some cases the price level of that pair.
Leverage merely dictates how large you may trade.
Ok, so for example, I am using 100:1 leverage, and my pip value seems to equal $1…if I changed the leverage to 10:1, then per pip it’s only 10 cents? or 50:1 it’s 50 cents? 200:1 is $2…is this not what is happening
I once accidently set my demo account with a 10:1 leverage meaning to set it at 100:1, and when my trade went up 30 pips, I only received $3.00 before I realized what happened. :eek:
I�m a little confused to! I want to know what determines the pip value. Lets say i open a mini account with $1000 and 50:1 leverage. What does it means? How much money can I use? What would be the pip value in tha case?
Thanks!!
Did you read Babypips chapter on how to calculate these values?
Here’s the link if not: Know Your P’s and L’s | Pre-School: Forex Basics | Learn Forex Trading
Try playing around with oanda demo. Because you can specify how many units you buy or sell. It’s not done in lots. So if you type in how many units you want to buy or sell it tells you the value per pip. So if you want to buy 10,000 units the value of one pip is $1.00. If you wanted to buy 5000 units then the value per pip would be $ .50 . 10000 units is about the size of a mini lot. So if you bought a mini lot then the value of one pip would be $1.00. The value of each pip is dependent on how many units of the currency you buy or sell. It is not affected in any way by the leverage you use. Leverage allows you to buy or sell currency using less of your own money.
Ok, OK, Ok… I know what happened now…I had just changed demo accounts from North Finance to IBFX and I had accidently set the leverage at 10:1 instead of 100:1…but IBFX also defaulted to 0.01 volume instead of the 0.1 I was used to using…that’s why my pip value was only .10 instead of 1.00…sorry I got it backwards…so no, I realize that it wasn’t the leverage that changed or has anything to do with the pip value…ok
Ok guys thanks!