Hi there lovely people , I have a newbie question regarding lot sizes. I am slightly confused even though I have read and done all off the baby pips course . This is still a pre school question.
I have been running a demo account for 4 months. really getting my head around things. In fact my 2nd demo account as I ran the first one into the ground and learnt so much in the process.
I have my strategy now that seems to be working fine. Sits comfortably with me and am almost ready to switch back over to my real account.
I made notes right at the the start.
My Lot sizes then were this for example
EUR/USD
0.01 = $3.04
0.10 = $30.40
1.00 =$304.00
I have only noticed today my Margin is Huge. On 4 or five positions open @ 1.00 each.
So I have calculated that one Lot size is now:
EUR/USD
0.01 = $38.96
I made many notes all several pairs and indexes even traded on the real account with some success and some mistakes.
Any thoughts would be helpful
I am with the broker AVA and am using MT4 . I will contact them as well if no one here can shed some light.
Thank you kindly
RJS
I Just opened my real account and thought I would place a very small amount on USD/CHF by mistake actually . should have been another pair. whoops .
0.01 is = $2.5 as before
so still a little confused… but feeling better if the real account has the original numbers
On MT4 accounts, AVATrade offers maximum allowable leverage of 400:1, which corresponds to margin of 0.25% (¼ of 1% of the notional value of your trade).
Therefore, on a EUR/USD trade with a notional size of 0.01 lot (1,000 units of EUR/USD), the notional value of your position would be $1,169.20 (assuming your account currency is USD, and given the current price of EUR/USD = 1.1692).
And margin on this position would be $2.92 (that’s ¼ of 1% of the notional value).
If your account currency is something other than USD, then the calculated margin would be slightly different — but, nowhere near $38.96. I have no idea where that figure came from.
Isn’t that just how much its cost you to open your current trades so if it costs me say $250 to open 1lot then it would show Margin: 250 so you must have like 20 lots open
(EDIT) isn’t that how much Margin you need to open these trades.
you bought AUD/USD at a price of approximately 0.7380, and
your account carries a margin rate of 5% (not 0.25%, as the AVA website advertises).
The notional value of your 0.10 lot AUD/USD position was $7,380 (approximately) when you entered your position. Therefore, 5% of $7,380 is $369 margin.
5% required margin corresponds to maximum allowable leverage of 20:1 (not 400:1, as the AVA website advertises).
Contact AVA for an explanation of your leverage/margin settings.
Lot size is usually expressed in the quote currency, that is 1 lot of EURUSD is 100 000 USD, one lot of USDJPY is 100 000 JPY.
If you want to calculate a fraction of the lot simply multiply 100 000 on the fraction, i.e. 0.01 lot is 100 000 * 0.01 = 1000 units of quote currency.
Now pip value. One pip equals 0.0001 from the lot size, i.e. for 1 lot pip value is 100 000 *0.0001 = 10 units.
Thank you Clint . That makes sense now . I am running my AVA account through a third party host called XM , maybe this has something to do with it also . As I am on a MAC computer with MT4 as a windows app …
One of my real accounts is looking like it is 400:1 . So it is just this demo account that is like this.
All a bit confusion . I have got to the point with my strategy all worked out and running ok . Now I am working on my risk management . So need the correlation with the numbers to be correct.
Hi there , MT4 is quite hard too get to work on a MAC , well not hard just a pain in the butt . You have to run something called WINE , to run windows applications .
I like AVA but they do not have a link on their site for a MAC friendly MT4 , But XM does on their home page under platforms. I don’t have an account with them. Demo or real.
Once installed you can then change your settings and away you go.
AVAtrade was the first broker i tested there setup is not the best Haven’t realy got a good word to say about them.
Use WINETRICKS i run 2 brokers on a Linux computer and they are fine if your getting lag then open MarketWatch Rightclick on it and click on Hide all it will run faster.
I think this is a very good point also . I have thought of this before. I may well bring the demo account down to the same as the real one and test again . So long as the main ratio is correct as pointed out by Clint here .
