My leverage/margin (eg math) question (now with 44% less sodium, and 33% more sarcasim!)
Lets assume you started with $1,000 with 50:1 leverage…
(every time my losses are substantial this is where I restart (typically happened at least once a week, not so much anymore!)
Money management has got to be one of the biggest things I would like to have double checked, to make sure I don’t have a fundamental flaw when it comes to this very very very important topic…
Now with this assumption my ‘pure’ spending power (sanity asside ) is 50*$1,000 for $50,000 correct?
5 Mini lots, where 1 pip is $1 with eur/usd?
if this is correct then its my understanding of oanda that needs to be clarified…
If I have the above, Oanda (to keep my stupid self in line most of the time) seems to only allow me to throw a sane portion of my funds in at one time, is this what it is (they don’t let you get a margin call when you start your trade, by having all of your funds (and theirs) in the market? seems to be around 3/4 of the above formula (as your max amount)…
Is this correct?
While profits are fairly easy to consider, let me clarify my understanding of losses…
lets make it smaller numbers, after all 2 of my last 2.5 trades have worked out, so I’m going to get lucky when I trade with real money right (warning: hair loss may be a symptom, batteries not included, sarcasm required where still legal)
assuming I wanted to really risk it and open an account with only $250 with 50:1 maximum leverage that means I can control about $12500, or 1.2 mini lots?
since one lot is 10,000, which is $200 * 50, that leaves me with $50 in pips I can loose is this correct? (assuming they let me get right up to the edge, I don’t think Oanda lets you let yourself go completely broke, they make it take awhile!)
Now I love Oanda, their philosophy, and as such I’ll trade with them, besides you can’t beat the fact that they really want you to succeeded! They show it in their tools, and the general way the accounts are set up (as far as I’m concerned) but for the life of me I cannot figure out how this margin call works, and I cannot just punch in the numbers everytime to figure out – I’m usually way to busy debating if I really do see anything or if my boredom is getting to me… (I’ve really need to find a solution to that – hey I see games! ;))
-Simy
ps: Some sarcasm included, which may or may not improve your/my/her/his/??? pip’ing. =)