Im trying to figure out How much I should trade on a eur/usd trade. I want to sell but I don’t want to risk anymore than $300. So if I were to sell at 1.19700 and set my stop loss at 1.21000, how much should I trade to ensure that I wont lose anymore than $300 if it were to hit my stop loss? Ive already read the articles in the school of pipsology and they don’t make any sense to me and either do the calculators. PLEASE HELP!!!
well mate, HELP is here hehe
Clearly you are a beginner, because only a beginner asks the question in this manner
ok, i’m not even going to ask you what % you are risking
i’m going to assume you know what you are doing there, and you have concluded that $300 is what you want to risk PER TRADE (which to be honest, sounds like a lot) so i’m assuming you have an account balance of like $10,000 + right.
but ok
$300 risk per trade
so do you mean
YOUR ENTRY is 1.1970
and
YOU STOP LOSS is 1.2100
ok so without even knowing your account leverage, Your Nominal Margin or the instrument that you are using
I’m going to assume that you have factored in your Margin
I’m going to assume that your instrument is a currency that follows the following rules for lot sizes
0.01 = 10 cents
0.1 = $1
and so on
so the difference between the entry and the stop loss is 130 piips
so clearly if you are risking $300 on this trade
you would do this
$300 divided by 130 pips = $2.30 per pip (Pip Value)
now to convert that to LOT SIZES
you do this
if 0.1 = $1 per pip
and 0.01 = 10 cents per pip
then 0.2 = $2
and 0.03 = 0.30 cents
so 0.23 LOTS is what you are after
Now. if trade responsibly and don’t get margin called, then yes you’ll only lose $300
and Assuming you are using an instrument that follows the above rules, you’'ll only lose $300
but you have not factored in Nominal Margin
so you will actually be risking more than $300
because if your margin is $20 then you are risking $320
if your margin however is $300 then you are really risking $600 Aren’t you ?
HERE IS WHAT YOU NEED TO FIND OUT
What instrument are you using
What is your account leverage
What is the current Exchange rate
What is the lot size you plan to use (we’ve calculated 0.23 Lots… so go off that)
What is the required Nominal Margin
Are there any other fees involved in the trade
does this help at all
Im using a demo account on meta trader 5 so what ever the default instrument is is what Im using. Which I believe is hedge. Account leverage is 1:100. And what is nominal margin?
Hi Ben,
To be honest, i can’t be bother to understand how they calculate. The way they explain it seem so complicated. This is what understand. It should be more or less accurate. Anyone, please correct me if i’m wrong.
This is what i see from your chart,
I assume the $-0.42 from your chart is the Bid-ask spread value.
From the right bottom corner USDCHF spread is about 3pip.
Thus, 0.42/3 = $0.14 per 2000units,
1000units = 0.14/2 = $0.07.
Meaning per pip gain or loss is approximately $0.07,
if your position size is 1000units (the equivalent of 0.01lot, if 1.0 Standard Lot is 100,000units)
1.21000 to 1.19700 is 130pip difference
if you enter a trade of 1000units (0.01Lot), 130 x $0.07 = $9.10 (value of 130pip)
Therefore, If you lose 130pip, the losses would be approximately $9.10 for trading USDCHF.
There is slight differences for trading different pairs since every pair have difference exchange rate value.
Let’s say you trade with 1000units position. To lose $300,
(300/9.10)x 130 = 4,285pip
You will need to lose 4,285 pip.
Hope this helps.
LOL…
Mate, NOMINAL MARGIN is going to be that thing that when you blow up your account and sit there and wonder WTF how did that happen, and then you scratch your head for a week and finally figure it out.
Nominal margin will be the thing that you forgot to calculate that reduced you account balance so to speak and increased your risk
Simply put
if you enter a trade and your account is leveraged
- You are required to decide on an instrument
- you are required to pick a direction (buy or Sell)
- You are required to pick a Lot size (hence, Amount you wish to trade)
Now based on all that
- YOU ARE REQUIRED TO PAY A NOMINAL MARGIN (A Security deposit , if you will)
let’ say you are entering a trade on EUR USD and you are buying , and the trade size is 100 Units
now let’s say you have a an account leverage of 1:100
this means
your broker agrees to put in $99 of the $100 as long as you put in a NOMINAL MARGIN of $1
this $1 is kept as security to enable the trade to run
you get it back at the end of the trade, assuming you don’t blow your account
Now let’s use more realistic figures
Account Balance ( A Typical Newbie account will be $400 )
now let’s say you enter a trade
and you don’t realize that the nominal margin is $300
but, you say to yourself, you’re prepared to risk $300
BECAUSE YOU THINK YOU ARE TRADING WITH $400 total
but you are not
because as soon as you enter the trade, THE AMOUNT YOU HAVE LEFT IS ACTUALLY $100
because $400 Account balance - $300 Nominal margin = $100 Free Margin
sometimes your Nominal margin can be low , like $20, other times it can be Several thousands of dollars.
so if you are not aware of it, you’ll get caught with your pants down and you’ll blow out your account
and then wonder WHAT HAPPENED
well. What happened was… you were not aware that you had a margin as high as it was
this is why it’s always a good idea to have a larger starting balance in your account
does that help you understand NOMINAL MARGIN
I keep hearing I need to pick an instrument. What is this? I don’t have this option on my demo account
that;s impossible
how can you not have the option to pick and instrument.
if you don’t have it , what are you trading ?
an instrument is either a Currency, commodity, Metal, Stock, Share, Alt Currency, Index etc
we don’t call them currencies’ or currency pairs, because not all of them are currencies, but all of them are instruments
to pick an instrument , In MT-4
go to the MARKET WATCH icon
there will be a big list
if there isn’t…
right click on something (anything) and select SHOW ALL
now PICK ONE
Right click on something say EUR USD for example
and select OPEN CHART
and voila, you have picked an instrument to trade
Hi Ben I couldn’t help notice you joined in Nov 2015 And in just over 2years you still don’t Know this simplest of things…???
I would give it a miss for a bit m8 go learn something else Basic maths and Basic Common sense,
Complete the Babypips School. Then have a Re-Think…!!!.
Good Luck.
2 Likes
hehe
i don’t want to be an A Hole to Ben,
but, Seriously… LOL… how can you not laugh at something like this.
Didn’t mean to sound mean or anything but Come On…? Really what chance they got against the Market if there asking stuff like this.
I know you gotta start somewhere but geeze i nearly choked on my Cuban…
1 Like
@A1lenTrader
No No mate… YOU ARE 100% CORRECT
they have 0% Chance of getting anywhere if they start like this
let me tell you something
AFTER READING HIS COMMENT , and then Yours hehe
I literally sat down and decided to write a new comment, Now. FOR ME that’s a big deal, because i don’t start new topics or new comments, i’m happy to just reply to them
but in this case, i thought
I’LL MAKE A NEW TOPIC THAT ADDRESSES ALL THAT STUPID CRAP THAT NEWBIES ASK
i then thought to myself ,… but … that’s what this site is for
then i thought to myself … if the newbies are that dumb , Instead of retyping all this stuff, i’ll just post them the link to that one post that answers all the questions
so i got started (and as you know i can easily write a wall of text hehe)
and WHAT A WALL IT WAS
5 minutes later, i had covered 3 topics and it seemed like an endless read
AND THEN I CAME TO THIS CONCLUSION
if the newbies are not prepared to do research on a basic level
HOW ARE THEY GOING TO PUT IN THE EFFORT TO READ MY POST
it’s not gonna happen
so… i hit the Cancel button
Mate, it is really a sad sad thing
but these newbies FACT IS… THEY ARE FIRETRUCKED… totally and Utterly FIRETRUCKED
and i’m a fan of not dancing around the subject
i mean, You said this…
Mate, … i would have said, PULL YOUR FINGER OUT OF YOUR (You know what word goes here hehe)
Seriously… come on… Seriously
They get to be this Retarded (i’m just gonna say it… i don’t care ok, I’m not being rude, but i’m just gonna bloody say it)
they get to be this retarded
and we have to say to them “Oh… i don’t mean to sound mean or hurt your feelings” LMFAO
and why
Because it’s the rules of the site
ok, i respect the rules of the site while i’m here
but, if this was my forex student and i was the mentor
i’d slap them upside the head pretty hard
then i’d tell them to stop wasting my time and have a nice day
I DON’T THINK THEY UNDERSTAND WHAT THEY ARE INVOLVED IN
i’ll just say this and then i’ll stop ok
you may remember about a month or so ago
some newbie came on here and said he wanted to know how to make $5 per day
(it was roughly at the time when i just came on after a really long break)
so. i replied to him ( i wasn’t aware about the rule of sharing emails and skype names at the time) and i shot him my email
i figured i’ll help the bloke. I didn’t charge him or anything like that (honestly)
i could have hehe seriously
and he was willing to cough up money, but i didn’t
anywhoo…
i watched his trading style… he was everywhere
didn’t know what instrument to use, just picking random stuff
doing the whole BOT thing
doing the whole MY FRIEND HAS A SIGNAL THAT WORKS thing
and i brought it to his attention that “That’s great, but you are not making money, Not even $5 a day”
this bloke has family and he is in a pretty bad way financially (no suprise there)
so… using US2000 and educating him on how to keep risk below 1%
i showed him how to achieve $ 5 a day by placing 1 - 2 simple trades per day that run no more than 4 pips
it was easy…
when we connected on skype at first, he had like 13 trades running and was like - $200 or so i think he has like $1500 Account starting balance and was freaking out that he would lose it
you know the story
what do i do… do i close all the trades and lose
or
do i hold and keep losing
hehe
anyway, i hedged out of it
i broke all the trades even by counter trading and maybe making a few cents - $1 on each break even
so… I CLEANED UP HIS MESS
we then started fresh
he made money for the first 2 weeks
he was excited as hell (as you can imagine)
and i told him
“ok, now you know how to be safe, so… keep practicing on demo and get good at it”
YOU KNOW WHAT HE DOES
NEWBIES PAY ATTENTION
- he continues trading live (with only like 2 weeks experience)
- he ups the $5 a day to like $20 and then to like $100
- i told him to stay on US2000 (for a reason) HE TURNED BACK TO CURRENCY
- He bought a BOT hehe (that doesn’t work) paid like $200
- he bought a SIGNAL SERVICE (that doesn’t work) Paid like $200
i then get on skype again, and say
"How are things going mate"
and he shows me his screen and he’s in the same crap ALL OVER AGAIN
I MEAN… WHY DO I BOTHER… Seriously
i then cleaned up his mess again
then we rinse and repeat
he does it all over again and i told him , NEXT TIME I WILL NOT BAIL YOU OUT
i read him the Riot act, i wasn’t polite, but i wasn’t rude, he understood
anyway
he does it again
Ohhh Mannnnn what do you do … you know
so he asking for my help again
could i bail him out… YES I COULD
did i
NO
he keeps beggin me to do it
i explain to him “I’m not your safety blanket, so that when you stuff up , you call me to clean it up” NO
i told him THIS IS WHY WE PRACTICE ON DEMO
it’s bloody simple
i told him… THIS TIME, YOU CLEAN UP YOUR OWN MESS
- You know how
- I’ve taught you how to do it
GO AN DO IT
this is the price you pay for not listening to me when i told you OPEN A DEMO FIRST.
-
I’ve shown him how to calculate lot size, Margin, Margin level % , Risk, how to plan Stops and Take profits, where to enter
Basically , picture a $1200 forex basics course… that’s what i did FOR FREE -
told him he was still fresh and even though i make it look simple, he needs to keep practicing on demo for at least 6 - 9 months minimum
what does he do HE GOES LIVE hehe -
ask him why he did that
basically… he got desperate and NEEDED THE MONEY
oh… the biggie
get this
this $1500 was LITERALLY HIS LAST MONEY
i mean… GO FIGURE
the last money that you have for you and your entire family and kids
AND HE GOES LIVE AFTER 2 WEEKS WITH THE ENTIRE AMOUNT (Double Face Palm) …WOW absolutely firetruckin WOW
now… i feel for the guy
he seems like a nice guy, he truly does
but i really do not think he’s gonna make it in forex
(NOTE TO ALL THE NEWBIES WHO ASK “is there a mentor out there who can help me”) hehe
well. the reason why we don’t, IS BECAUSE OF STUPID CRAP LIKE THIS
I EVEN DID THIS AT ONE STAGE hehe
(Read this … this is funny)
he was telling me he was going to pay like $200 for a bot
he swore to god “MY FRIEND SAID IT WORKS AND KEEPS MAKING MONEY” 
HALLELUJAH
i was literally about to give him a spreadsheet that helped him calculate risk before he entered a trade
and then he said this
and i thought … I’ll test him and see if he’s naive enough to give me $200 for a bloody spreadsheet HEHE
(now… i didn’t take money from the poor bloke, nor do i need his $200)
but, point is
i really made a speech of it
i said something like this
“Hey mate, since you are willing to pay $200 for a bot, what if i gave you a way to control your risk and to manage your trades so that you never lose more than you want to would you think that you would be a good thing”
(i’m purposely trying to lay on the pitch pretty thick, i’m guessing he was gonna pick up on it… but he didn’t)
he said “that would be awesome, how do i pay you” HEHE
i was like… SERIOUSLY??? (and he was FOR REAL)
anyway i kept on with the pitch a little
and I KID YOU NOT when i say , he was ready to give me credit card details
at which point i said to him
"Mate, don’t be stupid… ok, it’s a bloody spreadsheet" and i’m not your friend or someone you should be trusting
i’m just a guy that you met on babypips that agree to help you
it doesn’t mean you shouldn’t exercise some bloody caution. i mean, i could be a scammer.
next lesson
YOU DON’T EVER PAY SOMEONE FOR A SIMPLE CALCULATION ON A SPREADSHEET
and it should be obvious that since i’m helping you i would be giving it to you for free
this guy was just really really naive and thought that there was some magic forex pill
and he got really excited when he made money for like 2 weeks (and not a lot, but it was like $5 - $20 per day) and for him that was a lot
but GETTING BACK TO THE POINT
MATE, IF THEY ARE LIKE THIS… THEY HAVE NO CHANCE
they have no discipline
no self control
they are lazy and don’t want to study
THEY ARE FIRETRUCKED as you said.
be cool,
Hope you enjoyed the story
1 Like
Feel better mate hehe
Do you mean… Me or You ?
as in
Do you mean…
- You feel better after reading this
or - Do i feel better
if it’s 2. i don’t understand ?
if it’s 1. I’m glad you feel better and that i could help
Yea and Im the retard hehe You dummy!! Us retards are obviously really bothering you and you needed to get that off your chest. Do you you feel better now mate hehe? Btw you should be kicked off this site for talking about people like that. Watch your mouth big guy we can’t all be trading genius’s like you
Oh… you were referring to that hehe
mate, first of all CALM DOWN OK
Secondly… Seriously what did you expect after a question like you asked ?
I’m not being rude, but seriously, what did you expect
third, i’m not getting anything off my chest, i was just talking to the other bloke
and … the word RETARD didn’t just refer to you , it was collectively referring to people that ask stupid questions ok
Not just you
Now,
let me ask you this ok
(first, calm down… relax and answer this)
How in the world did you not know what this is
and also CAN YOU UNDERSTAND the level of lack of caring that you need to have in order to ask a question like this
NOW… I ANSWERED IT anyway… didn’t i
and… Can you blame me for feeling the way i feel after you asked it
SERIOUSLY
mate, if someone came up to you and asked you What’s the answer to 1+1
what would you think
this is the same thing
you would think
Holy Crap what an idiot… right
and then, to be polite, you would explain it to them… right
THAT’S WHAT I DID
so… don’t have a go at me for reacting to a stupid question
let’s get this out of the way as well ok
I’m not a BIG GUY
i’m not a TRADING GENIUS
what i am is… A GUY WHO TRADES PROFITABLY
so… do you want to learn or not ?
or would you like me to hold your hand and say “sorry for offending you even though the question was utterly and totally ridiculous”
now before you go reacting again
Understand this (i’m telling you this like a mate… ok, so don’t go getting stroppy on me)
clearly i’ve done my best to answer your questions
DO YOU NOT APPRECIATE THAT ?
and then you got triggered BY 1 WORD
mate, if you worked at an investment bank, you wouldn’t last a day … ok
let’s put it in this light
you said this
did i get offended… NO
i understand that
-
i was confused thats why i asked the question, because it’s better to ask than to assume …r ight
-
i also understand you are offended and you are venting. so i let it slide
now you could also say
but martin, i also jjust asked a question
YEAH… BUT THERE’S A BIG DIFFERENCE BETWEEN THE QUESTION I ASKED AND WHAT YOU ASKED
my question cannot be researched other than talking to you
YOUR QUESTION COULD HAVE BEEN RESERACHED
example
why could you not have googled “What is an instrument in forex” and then gone to investopeadia and looked it up
mate… @A1lenTrader is right
FOREX IS NOT FOR EVERYONE (this is a hard truth some people need to face)
and FOR YOU, if it’s a truth, it’s better that you hear it like this than after you lose $20 grand or so ok
he’s right
if you don’t have the basics down
if you couldn’t be stuffed to research this stuff
WHAT HOPE IS THERE FOR YOU
Now. can this be rectified… YES. OF COURSE IT CAN
but, not if you are going to get offended all the time
because mate…
when you’re trading and the broker robs you blind of your money
YOU ARE GONNA BE PISSED … Trust me
and then you are gonna try and get your money back AND YOU’LL LOSE MORE
and you will continue to get pissed off and the broker will laugh at you and take your money
you will then get to a point where you are so pissed of and broke that you will just leave forex
so… IF YOU DON’T KNOW HOW TO RELAX… don’t trade
IF YOU DON’T KNOW THE BASICS… don’t trade
IF YOU CAN’T BE BOTHERED RESEARCHING… don’t trade
it’s a simple as that ok
I’m not being rude, but i am allowed to speak my mind
and when someone says something like what you say… mate… CMON SERIOUSLY
what am i supposed to think… REALLY ???
Now, it should be obvious to you by now that i’m not being rude
and by that last post of mine it should be obvious that i like helping people
WHICH IS WHY I HAVE NOT TOLD YOU TO F OFF, OK
instead, i’m trying to teach you something
and you are either going to learn
or
you are going to tell me to F off
if you do
You won’t succeed at trading because it will prove that you don’t have what it takes
so… MAKE A DECISION
Feel free to ask questions if you want
but, i would stress, DO SOME RESEARCH BEFORE YOU DO ASK ok
and for the record
(as a result of your comment ) i don’t hate you (Regardless of what you might think)
so… what happens from here is a DECISION THAT YOU MAKE ok
get back to me
Most of your Questions are probably answered in The BabyPips School Of Pipsology under the Education Tab.
@anon81929759 You got that guys number still i just created a Mega… Bot. !! lol
only kidding… At least you tell it as it is Martin and fair play for going that extra bit for us New to this Trade.
that’s right
i mean… i’m not trying to insult, but
we are not in kindergarten here… this is Retail Trading
and i understand that they don’t take it seriously to begin with, but they should
if they want advice, we give it
and they should understand this is how it is.
and also, i was talking to you not him
i thought what you said was funny hehe
i mean. sue me for thinking it was funny … Jeez
you can’t even laugh anymore without someone having an issue
and then … you can’t even say someone did something stupid when they did without someone having an issue
I REMEMBER BACK IN THE 80’s right
you’d go to your mates house, there’d be a few mates there
and you’d go in the back yard to play cricket of footy or handball or whatever
your mates mum just cleaned the back glass sliding door (without a streak) and YOU WALK STRAIGHT INTO IT thinking the door was open… right hehe we all remember this…
now… You look like a total idiot… right
but, YOU ACCEPT IT
you don’t have a go at your mates when they say DUUUUUHHHHH hehe
you just accept , you stuffed up and didn’t look properly
the bloke has the internet at his fingertips
here… in like 10 seconds
google search
FOREX TERMINOLOGY INSTRUMENT
voila
takes like 5 seconds
and he is having a go at me LOL
in my day you had brittanica encyclopeadia
you sat on the floor and opened up the volume you needed and you took like 15 mins to just find what you needed
they have all this now and more at their fingetips and they still need to ask
oh well.