Account size:�500
Volume: 0.5 (Does this mean I’m buying 50,000 units worth?)
Currency: EURUSD
Buy: 1.29756
Stop Loss: 1.29000
Take Profit: 1.30500
Can someone please give me an calculations of how much is a pip worth, how much risk I have in this trade and how much money would I have made and lost, based on it hitting both Stop Loss and Take Profit, as I’m getting a bit confused so want a definitive example based on my numbers? If I don’t put a stop loss on at what price when would I have a margin call?
I’m demo trading MT4 at the moment and not sure what the profit number relates to. Is it the number of pips, the profit in monetary terms?
Sorry for these real newbie questions and am grateful for any replies.
It is my opinion that lotsize is determined according to your account with your broker based on the limits of your account… I am sure there is a minimum requirement per lotsize brokers will allow at each level, and am certain there is a max allowed tradable until you get to a full lot account, at which point I am currently unsure.
I have heard of a man who has a full lot account in another country from my own that trades a full lot account in lot sizes of 50, 100 and 200 full lots. That said, there is much to aspire to.
First problem, are you looking for the answer in pounds, as you have
a sterling account, or the answer in dollars?
Most calculations are answered in dollars so you will need to be able
to assimilate the two.
Also the volume amount can differ on whether the account is a mini
account or standard account. On a standard account 0.5 = half a standard
lot (standard lot = 100 000 units) therefore 50 000 units.
This then equates to standard lot = $10/pip ($10/1.38 = �7.24) therefore half = $5/pip (�3.62).
Note 5 dollars, not 5 pounds.
(On a mini account just halve the amounts 100 000 = 10 000, $10 = $1 etc.)
Profit & loss, 75 pips +/- , so 75 x $5 = $375.
So with the exchange rate at present 1 GBP = $1.38 ish therefore
$375 = �271 approx.
Expect a margin call when you get within 10% of you account total,
approx. These figures vary from broker to broker.
For an easy way to make the calculations open a demo account with
Oanda in dollars & pounds, then plug in the figures.
“There is always somebody who thinks they can ice skate up hill” Wesley Snipes in Blade
I think I will be opening a mini account - from what I understand, there’s no point opening a standard lot account with only �500 is there?
So a lot would be 10,000 and each pip is worth $1. According to Griffin’s post we don’t count the 5th decimal place as a complete pip - it’s only a fraction of a pip, we count only the first 4 decimal places?
Is a pip in a mini account always worth $1? If each pip is worth $10, $1 or $0.1 then what is this calculation in the babypips school for?
“USD/JPY at an exchange rate of 119.90
(.01 / 119.80) x $100,000 = $8.34 per pip”
If I buy 2 complete mini lots, this would equate to 2 * 10,000 = 20,000 costing me (1.29756 * 20000)/100 = $259.512, assuming a 100:1 leverage, this is also known as my used margin? And my free margin is $240.488?
So the price would have to go down ~190 pips (Free margin minus 10% of my �500 account) assuming no stop loss, before I get a margin call?
heres my take on it. First don’t figure your stop based on equity but rather base it on a technical reason for example 2 pips past the last swing high or low. I am going to assume that you are following some sort of money management either 2% or 5% or whatever. For this example I would use 2%
take your account size and multiply it by .02 (or 2%)
500 x .02 = 10
10= maximum risk per trade
figure your stop loss lets say for this example 20 pips away
10 / 20 = .5
so your pip total would be .5
you can use this very basic idea to figure out your risk for any trade
first define your risk tolerance in percentage
then find the value in terms of your account size
then take that value and divide it by the number of pips from your stop loss
Thanks johnnykanoo but i have to admit. I’m a bit confused about your post. Are you answering my post asking if my figures are correct?
In your example, does that mean with a �500 account I would only risk �10 per trade with a 2% risk? Regarding the pip total/value figure you gave of 0.5. What does that actually mean? That each pip is worth 50p (500 GBP account)? Sorry for being a bit slow lol. :o
Can anyone answer if my calculations are correct please?
As I have mentioned previously you need to think of these problems
in one currency alone. The best way at present is to think in dollars
as all examples are normally in dollars.
Then when you are comfortable with that transfer the figures into sterling.
Hey daydreamer, how did you figure out the amount per pip in US dollars.
$10/pip? whats the calculation here? Still trying to figure out how to figure these numbers out. Thanks.
It all revolves around the way a trade is calculated.
There is no simple calculation but, in the calculation below from the Oanda website, you can see taking a short trade is not as simple as just pressing a button, but with computer technology the calculation can be equated in a milli-second.
The following examples illustrate how to calculate profit or loss when you close particular trades. (Interest differentials are not considered.)
You see that the rate for EUR/USD is 0.9517/22 and decide to sell 10,000 EUR. Your trade is executed at 0.9517.
10,000 EUR * 0.9517= 9,517.00 USD
You sold 10,000 EUR and bought 9,517.00 USD.
After you trade, the market rate of EUR/USD decreases to EUR/USD=0.9500/05. You then buy back 10,000 EUR at 0.9505.
10,000 EUR *0.9505= 9,505.00 USD
You sold 10,000 EUR for 9,517 USD and bought 10,000 back for 9,505. The difference is your profit:
9,517.00-9,505.00= $12.00 USD
So working back, the market moved from 0.9517 to 0.9505 which
equates to 12 pips, the profit is $12, therefore $12/12 = $1/pip.
The calculations are good and helpful for me and other traders. I have experience about he market and trading but I was not properly aware about the calculations.
