PIP value when account is leveraged

Beginner Questions
1

Hello Everyone,

Iam a beginner in forex.

I understand that $10000 is a lot,therefore 1 pip = $1 (Depends on the currency pair)

how can I calculate pip value when iam leveraged.
For example.

If I deposit $500 in my account which is 50:1 leveraged.

I trade with a lot size of 0.05
What is each pip worth? and how?

Can anyone help me?

2

A standard lot is 100,000 units of the base currency, which may or may not be USD.

[B]A mini-lot is 10,000 units of base currency,[/B] which may or may not be USD. If the [U]base currency[/U] is, in fact, USD (as, for example, in the USD/JPY pair), then a mini-lot is, in fact, $10,000.

However, 1 pip in this case is [B]not[/B] $1.

For an account denominated in USD, one pip = $1 per mini-lot when the [U]quote currency[/U] is USD (as, for example, in the EUR/USD pair).

As mentioned above, one standard lot is 100,000 units of base currency.

Let’s assume that you are trading a pair of the form XXX/USD, in an account denominated in USD, such that 1 pip = $10 per standard lot.

If you trade 0.05 lots, you would be trading 5,000 units of base currency (0.05 x 100,000 = 5,000).

Given that 1 pip is worth [U]$10 per standard lot[/U], we can calculate that —

1 pip is worth [U]$0.50 per 0.05 standard lots[/U] (0.05 x $10 = $0.50).

Notice that your broker’s maximum allowable leverage (50:1 in your example) has no bearing on pip-values. Maximum allowable leverage simply determines how much margin is required on your trades.

Also, the balance in your account ($500 in your example) has no bearing on pip-values.

Pip-values are determined by (1) the [U]quote currency[/U] of the pair you are trading, (2) the currency in which your account is denominated (your account currency), and (3) your position size.

.

3

Try dowloading a Pip calculator from Google, then checking with your calculator.

4

Or just use the tools Babypips kindly provides for us … :wink:

[B]Pip Calculator: Free Online Forex Pips Calculation Tool for Traders
Position Size Calculator: Free Online Forex Position Sizing Calculator[/B]

5

Leverage has no bearing on pip value, it only makes you loose faster (to be precise when you increase leverage you proportionally increase risks of losing your deposit). So steer clear from high leverages such as 1:1000 or 1:500, you can try them for one-time win-or-lose trade (have special fixed spread at Hotforex to trade news using small deposit with very high leverage as backup strategy).
Good luck.