Hello,
I am learning how to trade Forex, and I have a few questions about lot size.
-
If you have deposited $1000 and playing with a leverage of 1:100, is the user trading with a standard lot or mini lot?
-
I have read somewhere that lot size = (risk amount/stoploss) / (pip value/exchange rate). Is that correct?
-
Assuming the user have $500 and playing with a leverage of 1:50, how do we calculate the lot size if the user wants to risk 5% of his capital and have a stoploss of 25 pips?
-
Assuming the user have $500 (without leverage), how do we calculate the lot size if the user wants to risk 5% of his capital and have a stoploss of 25 pips?
-
If the user starts with the same capital and trades with the same risk (like question 3, 4), aren’t the user risking the same amount of money and looking for the same amount of reward (because the user will just adjust the lot size accordingly)? Then what’s the point of using leverage?
Thanks