Newbie Question (Please don't shoot me, I'm a newbie)

[xps]

1> if I will deposit $1,000 mini account, does it means that 1pip = $1?

2> I always practice “stop loss” with 30pips and “take profit” 90pips. Based on my experience it always stop my trade, do you think 90pips take profit is too big that�s why I always got stop. Do I need to adjust it or continue that trading system?

3> I don�t want to do any scalping in my trading system, can you please explain or help me to understand what should I do so that I will not practice that “scalping”

4> can you please explain if I open $1000 account, what do you mean by “trading only 3% of your account”. If I have $1000 open account is my risk (30pips)/reward(90pips) should i adjust if I used 3% of my account when I trade?

I’m just knew and practicing demo account for almost a month now and I’ll practice demo account for 3 more months before opening an account.

Sorry for my bad english too.

[daydreamer65]

Have you been to the school???

Babypips school. Forex Training & Education: Beginner Foreign Exchange Currency Trading

Go through it at least once then ask questions.

[xps]

Have you been to the school???

Babypips school. Forex Training & Education: Beginner Foreign Exchange Currency Trading

Go through it at least once then ask questions.

yes i’ve been there already.

maybe i need something to talk to so that i can relate what i’m not understand.

thanks for your reply though.

[daydreamer65]

1> if I will deposit $1,000 mini account, does it means that 1pip = $1? No, trade value determines pip value. ie
100 000units = $10/pip, 10 000units = $1/pip etc.

2> I always practice “stop loss” with 30pips and “take profit” 90pips. Based on my experience it always stop my trade, do you think 90pips take profit is too big that�s why I always got stop. Do I need to adjust it or continue that trading system?
Vary your take profit until you have a winning system.

3> I don�t want to do any scalping in my trading system, can you please explain or help me to understand what should I do so that I will not practice that "scalping"
Don’t open large lot sizes & take profit within a few minutes.

4> can you please explain if I open $1000 account, what do you mean by “trading only 3% of your account”. If I have $1000 open account is my risk (30pips)/reward(90pips) should i adjust if I used 3% of my account when I trade?
Loss per trade should not be greater than $1000 x 0.03
= $30. If you trade 10 cents/pip (1 000units) this gives you are big range.

I’m just knew and practicing demo account for almost a month now and I’ll practice demo account for 3 more months before opening an account.

Sorry for my bad english too.

yes i’ve been there already.

You need to read & re-read these 2 sections again.

Leverage the Killer | College: The Number One Cause of Death for Forex Traders | Learn Forex Trading

Money Management | 13th Grade: Money Management | Learn Forex Trading

[rhodytrader]

1> if I will deposit $1,000 mini account, does it means that 1pip = $1? No, trade value determines pip value. ie
100 000units = $10/pip, 10 000units = $1/pip etc.

This is only true for pairs where the USD is quote currency (second one) like EUR/USD and GBP/USD. It is not necessarily true for the likes of USD/JPY or USD/CHF.

2> I always practice “stop loss” with 30pips and “take profit” 90pips. Based on my experience it always stop my trade, do you think 90pips take profit is too big that�s why I always got stop. Do I need to adjust it or continue that trading system?

Without knowing what you’re trading and in what timeframe, we can’t possibly answer that question with any conviction.

3> I don�t want to do any scalping in my trading system, can you please explain or help me to understand what should I do so that I will not practice that "scalping"
Don’t open large lot sizes & take profit within a few minutes.

Lot size really doesn’t have anything to do with it. Scalping is trading in and out very quickly looking to grab very small pip profits and doing it many times in a day.

4> can you please explain if I open $1000 account, what do you mean by “trading only 3% of your account”. If I have $1000 open account is my risk (30pips)/reward(90pips) should i adjust if I used 3% of my account when I trade?

It’s not “trading” only 3% (or whatever number), it’s “risking” only 3%

[johnnykanoo]

for a $1000 account and so many basic trade management questions I would recommend a broker that has micro lots(.01) . I use IBFX and I personaly like micro lots when I am “demoing” I prefer real money so I make sure and risk very little. Your best bet is to demo trade until you have your stops and take profits worked out. If you are not careful you can blow a $1000 account in no time at all

[xps]

You need to read & re-read these 2 sections again.

Leverage the Killer | College: The Number One Cause of Death for Forex Traders | Learn Forex Trading

Money Management | 13th Grade: Money Management | Learn Forex Trading

thank you for the link…nice refresher!

Loss per trade should not be greater than $1000 x 0.03
= $30. If you trade 10 cents/pip (1 000units) this gives you are big range.

if you dont mind, can you please explain it more.

thanks!

[xps]

Without knowing what you’re trading and in what timeframe, we can’t possibly answer that question with any conviction.

i’m using 15mins/1hr/4hr chart and i based my decision on trading base on that time difference and by using MACD, RSI & Stoch.

i enter my trade (demo) almost every night (8pm EST) or should i say i check my trade demo during that time only.

is that the info you’re looking for? hope you can reply.

thanks

[xps]

for a $1000 account and so many basic trade management questions I would recommend a broker that has micro lots(.01) . I use IBFX and I personaly like micro lots when I am “demoing” I prefer real money so I make sure and risk very little. Your best bet is to demo trade until you have your stops and take profits worked out. If you are not careful you can blow a $1000 account in no time at all

i’m using IBFX demo now and i cant change it to 0.01 lots…

thanks for the advise!

[mytwopips]

i’m using IBFX demo now and i cant change it to 0.01 lots…

thanks for the advise!

It won’t be on the drop list. You need to type it in.

[JonnyFX]

Actually, on the Volume tab, .01 to .05 does
show up on the drop-down menu on the
order window. Another good plan is to
be thoroughly familiar with your trading
platform, in this case MetaTrader 4.
Get to know it inside and out ASAP!

[gasanvill]

XPS…risking only 3% of your capital in every trade, means that if you have US$ 1,000, and if the market goes agaisnt you, you only stay in the trade until you lose US$30, no more. So you need to establish your Stop Loss and lots per trade in order to lose only US$ 30 (in case the market goes against you obviously). I dont care if the trade goes against me 25 pips or 40 pips or 100 pips, the risk is always the same 3%, the only thing that changes is the number of lots you trade.
First you establish your stop loss based on your analysis, lets say you have determined that you need a stop loss of 3 pips. Then, based on that, you have to calculate the number of lots to trade, so you dont risk more than 3%.
In this case you only have to trade 1 lot because each lot of a standar account means 1pip=US$10. So if the market hits your stop loss(remember 3 pips), you will lose only 3%!

[xps]

It won’t be on the drop list. You need to type it in.

i just check in “new order” button, there’s a volume which you can select 0.01…is that the one?

[xps]

Actually, on the Volume tab, .01 to .05 does
show up on the drop-down menu on the
order window. Another good plan is to
be thoroughly familiar with your trading
platform, in this case MetaTrader 4.
Get to know it inside and out ASAP!

MetaTrader4 is the same as what IBFX platform right?..i’ve been practicing that for more than a month now but i dont have the guts entering live trade without confidence on my system.

btw, what’s indicator you are using in MT4?

[xps]

First you establish your stop loss based on your analysis, lets say you have determined that you need a stop loss of 3 pips. Then, based on that, you have to calculate the number of lots to trade, so you dont risk more than 3%.
In this case you only have to trade 1 lot because each lot of a standar account means 1pip=US$10. So if the market hits your stop loss(remember 3 pips), you will lose only 3%!

Hi Gasanvill,

The analysis your talking about is the indicator right? If that so, if i’m using MACD/RSI/Stoch how can i determined i need a stop loss of 3pips?

then how can i calculate the number of lots to trade by not risking more than 3% of $1000?

sorry for asking this…i really want to know how this "risking 3% of my account ($1,000) works.

[xps]

4> can you please explain if I open $1000 account, what do you mean by “trading only 3% of your account”. If I have $1000 open account is my risk (30pips)/reward(90pips) should i adjust if I used 3% of my account when I trade?[I]

Loss per trade should not be greater than $1000 x 0.03
= $30. If you trade 10 cents/pip (1 000units) this gives you are big range.[/I]

hi again, can you pls explain more regarding 10cents/pip (1 000units) will give me big range?

because if i will open $1000 for micro account…1pip=$1 right?..so its mean my stop loss should be 30pips (which is equivalent to $30)

[gasanvill]

Lets talk about some basics, that i think will help you:

1 standard lot is 100K (100,000), that means that if you trade 1 lot then 1pip=US$10 (lets asume is EUR/USD)

1 mini lot is 10K (10,000), that means that you trade 0.1 standard lot, get it? If you trade 0.1 lot or 10K, then 1pip= US$1.

You can decide if you trade 1 lot or 0.1 lot or even 0.01 lot (this would be 1k). If you decide to trade 0.01 lot, then 1pip=0.1US$. get it?
Lets see what do we have so far:

1 standard lot: 1pip= US$10
0.1 standard lot: 1pip= US$1
0.01 standard lot: 1pip= US$ 0.1

It doesnt matter if you open a standard or mini account, you can choose the volumen you trade in the window of “new order”. you can put 1, or 0.1, or 0.01 or any number you want. There are standard accounts that allow you to trade 0.1lots, that means 1pip= US$1, but you decide if you do it or not, get it? Of course you can also trade 0.2 lots or 0.3 lots or 0.534 lots, i dont know, but the pip value will change.

about the stop loss, well you can use indicators or resistance or support levels. For example, you know the resistance level is 3 pips away from your enter point, and you want to enter short, then that is how you establish your stop loss.
then you need to calculate the volume, so you dont risk more than 3% of your account, and you know your stop loss is 3 pips. there is a formula to do that, i have it in excel, sende me a private message with your email and i cant sendi it to you and explain…

[xps]

Lets talk about some basics, that i think will help you:

1 standard lot is 100K (100,000), that means that if you trade 1 lot then 1pip=US$10 (lets asume is EUR/USD)

1 mini lot is 10K (10,000), that means that you trade 0.1 standard lot, get it? If you trade 0.1 lot or 10K, then 1pip= US$1.

You can decide if you trade 1 lot or 0.1 lot or even 0.01 lot (this would be 1k). If you decide to trade 0.01 lot, then 1pip=0.1US$. get it?
Lets see what do we have so far:

1 standard lot: 1pip= US$10
0.1 standard lot: 1pip= US$1
0.01 standard lot: 1pip= US$ 0.1

It doesnt matter if you open a standard or mini account, you can choose the volumen you trade in the window of “new order”. you can put 1, or 0.1, or 0.01 or any number you want. There are standard accounts that allow you to trade 0.1lots, that means 1pip= US$1, but you decide if you do it or not, get it? Of course you can also trade 0.2 lots or 0.3 lots or 0.534 lots, i dont know, but the pip value will change.

about the stop loss, well you can use indicators or resistance or support levels. For example, you know the resistance level is 3 pips away from your enter point, and you want to enter short, then that is how you establish your stop loss.
then you need to calculate the volume, so you dont risk more than 3% of your account, and you know your stop loss is 3 pips. there is a formula to do that, i have it in excel, sende me a private message with your email and i cant sendi it to you and explain…

Thanks! Now I almost get it.

Let me know if I understand it now base on what I will open live account:

1> Open Micro Account
2> Deposit = $1,000
3> 1lot means 1pip=$1
4> 0.1lot means 1pip=10cents
5> So if I will set my Stop loss 30pips that means that it will cost me $30 for 1micro lot.
6> If I want to change it to 0.1lot I can set up my Stop loss to 300pips ($30) if I want to risk 3% of my account ($1000).

Do I understand it correctly?

[rhodytrader]

Let me know if I understand it now base on what I will open live account:

1> Open Micro Account
2> Deposit = $1,000
3> 1lot means 1pip=$1
4> 0.1lot means 1pip=10cents
5> So if I will set my Stop loss 30pips that means that it will cost me $30 for 1micro lot.
6> If I want to change it to 0.1lot I can set up my Stop loss to 300pips ($30) if I want to risk 3% of my account ($1000).

Do I understand it correctly?

First of all, it’s the same on a demo account as a live account.

Second 1 lot means 100,000. A mini lot (.1) is 10,000. A micro lot (.01) is 1,000.

Third, for a pair in which the USD is the quote currency (that’s the 2nd one), and only in that case is a pip fixed. For a full lot it’s $10, mini is $1, micro is $0.10. That means for 1 micro lot a 30 pip risk is $3.00.

[rhodytrader]

i’m using 15mins/1hr/4hr chart and i based my decision on trading base on that time difference and by using MACD, RSI & Stoch.

i enter my trade (demo) almost every night (8pm EST) or should i say i check my trade demo during that time only.

is that the info you’re looking for? hope you can reply.

No. The question is what pair you trade and how long you normally hold your positions.