Hi @togr
As you have correctly pointed out, the amount of money you risk per pip is determined by your trade size. A trade size of 1 standard lot (100,000 units or 100K) on EUR/USD risks $10 per pip regardless of whether you are required to put up $37,000 as margin for that position or $224.
That said, it’s important to understand that the risk you personally choose to take on as a trader is not your only risk when trading forex or futures for that matter. In markets like these, where traders use leverage, you must consider the financial responsibility demonstrated by your broker.
Margin requirements should be set by regulators and brokers (and in the case of futures by exchanges as well) by taking into account the perceived risk of a given currency pair. That’s why you will sometimes see them raise margin requirements due to heightened risk from geopolitical concerns.
Is it wise to trust your money with a broker that offers 500:1 leverage to attract customers with no regard for the potential risk to the firm or its clients? The danger to you, if such a broker has not required adequate margin from its clients for the risk they take on in the market, is that your own money can be at greater risk due the losses incurred by other traders and your broker.
“Only when the tide goes out do you discover who’s been swimming naked.” - Warren Buffett