zmaalinvest
Recruit
- Messages
- 6
I'm getting ready to put my money into the forex market. I'm having some problems with lot sizes though.
Say, I have a $1,000 account and I want to trade 5% or $50 of my account.
For some reason the way most people explain it, I'm having a hard time understanding lot sizes but this is how I understand it:
1 lot = $1/pip
0.1 lot = $0.1/pip - mini
0.01 lot = $0.01/pip - micro
Ok so now I want to trade EURNZD, buying at say 1.64000 with a S/L of 1.63500 and T/P at 1.67000.
So basically, according to my understanding, to lose $50 max, I'm gonna need to buy 1 mini lot of EURNZD.
1.64000 - 1.63500 = 500
500 x 0.1 = 50
I used a calculator online and I'm not sure how but it came down to 0.21 lot for me to lose a max of $500 on my demo account on a $10,000 account. The price swings seemed to be in the direction I was hoping they would after I did that.
Can someone please simplify this for me? How does leverage affect this? What's a simple formula for me to use and know exactly how much I'm risking?
Say, I have a $1,000 account and I want to trade 5% or $50 of my account.
For some reason the way most people explain it, I'm having a hard time understanding lot sizes but this is how I understand it:
1 lot = $1/pip
0.1 lot = $0.1/pip - mini
0.01 lot = $0.01/pip - micro
Ok so now I want to trade EURNZD, buying at say 1.64000 with a S/L of 1.63500 and T/P at 1.67000.
So basically, according to my understanding, to lose $50 max, I'm gonna need to buy 1 mini lot of EURNZD.
1.64000 - 1.63500 = 500
500 x 0.1 = 50
I used a calculator online and I'm not sure how but it came down to 0.21 lot for me to lose a max of $500 on my demo account on a $10,000 account. The price swings seemed to be in the direction I was hoping they would after I did that.
Can someone please simplify this for me? How does leverage affect this? What's a simple formula for me to use and know exactly how much I'm risking?