Hi, at the end of the day no matter how many pips u earned, the lot size u entered will define how much u earned.
it is definitely possible, to get 100% profit from 30pips but it means that u have overtrade.
For example if u only risk 0.1% of ur acc to trade then 30pips is only 3%gain
So even with a 100pips trade u need to enter a 7.5 lot(leverage of 1:100), and any small movement against you, you will get margin call...risk is too high...

Still i would like to share a concept, to fight inflation, fast money will not help, make investment (anything) with good risk management and consistency can help us!
Malaysian Boleh!!!

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This post has been edited by louiehky: Jan 21 2015, 10:47 AM

Hi guys,

Am doing some reading in babypips on position size. I don't quite understand the following bold and underlined area:

Ever since he blew out his first account, he has now sworn that he doesn’t want to risk more than 1% of his account per trade. Let’s figure how big his position size needs to be to stay within his risk comfort zone.

Using his account balance and the percentage amount he wants to risk, we can calculate the dollar amount risked.

USD 5,000 x 1% (or 0.01) = USD 50

Next we divide the amount risked by the stop to find the value per pip.

(USD 50)/(200 pips) = USD 0.25/pip

Lastly, we multiply the value per pip by a known unit/pip value ratio of EUR/USD. In this case, with 10k units (or one mini lot), each pip move is worth USD 1.[U]

USD 0.25 per pip * [(10k units of EUR/USD)/(USD 1 per pip)] = 2,500 units of EUR/USD

So, Newbie Ned should put on 2,500 units of EUR/USD or less to stay within his risk comfort level with his current trade setup.

Read more: http://www.babypips.com/school/undergradua...l#ixzz3PQfRAHNO


Hope sifus can decode it into a more simpler english!

Wow, I also
Here's how I do it the plain and simple way :
So based on the example above, want to risk 1% so can only risk USD 50,
and the SL is 20 pips away from entry (example gives 200 pips, which is too big for risking USD50 ), so to calculate lot size needed : USD 50 / 200 = 0.25 lots.
Note why I divide USD 50 with 200 even though SL is 20 pips, it's because 1 pip = USD 10
An intersting fact : 20 pips in MT4 charts would be 0.00200

This post has been edited by Supreme1394: Jan 21 2015, 01:32 PM

I understand the first step and 2nd step.. which is dividing your risked amount of USD50 with the SL.

But i dont get the next step...

the paragraph is somehow confusing..lol...

Summarized of my understanding:
1) risk 1% of account size, with Account size USD 5,000, worst case u can lost USD50/trade
2) trade set-up: if the trade u going to enter having a 200pips SL then the maximum lot u can enter is 0.025 lot(2.5 micro lot) cuz 0.25USD*200=50USD
3) Lastly, the part "multiply the value per pip...with 10k units(1mini lot)..." is to calculate what lot size you should use, it is actually extra move cuz he already calculated that he can risk 0.25USD per pip which means 0.025lot

**minimum lot size ,most brokers offered is 0.01lot(1 micro lot/1000units), i not sure whether u can enter 0.025 or not.
*** this is a simple rule to start trading in LIVE, it is good cuz trade like this you wont get MarginCall while gaining experience
****For trade setup there still few things to remember other than trader's risk management, which is BASIC: leverage level, market hour, Support&Resistance & trend, DEEPER: indicators signal & Fundamental News~

Hope this will help~

Want to give everyone a heads up with experience with FXPRO.
They hunted down my Stop Loss today after GBP news at 5:30pm!!! The ask price was never reached!
I have an order to sell gbpusd at 1.51315 and SL at 1.51724. The price was never even reach and my order was shown closed DUE TO SL...
Lost about 40 pips where i could be profit because of the GBP news.

Fcking nonsense they said they are no desk dealing brokers.

No.. this is common because their spreads can increase to over 40 pips during news. If the spread at that time is over 40 pips, they will open your sell order and then immediately close it due to SL. It happens on almost all platforms unless they can guarantee fixed spreads during news which is not going to happen.

My opinion is that your SL was too close, so widening spreads will easily trigger it. If I were you, I would have put my SL at a much safer 1.52050

This post has been edited by Supreme1394: Jan 21 2015, 06:26 PM

You could be right, but even on last chf blackswan case, i didn't exaxtly see a apread of 40pips, though they requoted it so many times and decide to suspend chf trading at the end. Anyways i think i'll just go with mental SL from now on.

Thanks for the advice.

Seems like you being angry at variable spread. Change to fixed spread account.

CHF was a totally different story as they weren't expecting the removal of the peg. The spread is determined by the broker. You must always have a SL but you can have one SL that is 100 pips and run an EA to have a virtual SL at 40 pips (or whatever SL your strategy requires). Once the price hits the virtual SL, your EA will stop it but of course this only works with your client running all the time. This prevents stop hunting since the broker can only see your SL that is 100 pips away and not the virtual one.

Do note when I mentioned stop hunting I wasn't referring to the increase in spread situation that you had. Stop hunting has a slightly different meaning to it and you can look it up on google.

Thanks for putting money into my pocket, sleepwalker. Will try it out.

Yes, because it was a big lot.
Well, at least it has been a valuable lesson for me.

And which broker actually guarantees fixed spread during news? You hardly find any of them nowadays.

Also to successfully trade news you'd also need no slippage which is another thing brokers can't guarantee.

This post has been edited by sleepwalker: Jan 21 2015, 07:49 PM

Which brokerage house do you sifu recommend? Wanted to start with small capital.

thanks for the reply

im just planning to try and experience forex. im just planning to start with just 100USD. so bigger leverage mean bigger profit hence bigger risk?

if i were to deposit, who do i deposit to?

which platform/apps is better to use? is meta trader 4 good enough?

This post has been edited by RonaldF: Jan 21 2015, 08:42 PM

Thanks for the info. Let's say my start up capital is 100USD, what ratio of leverage would u recommend? and which apps do u recommend?

Honestly, 1:500 leverage because your $100 is quite small. I would recommend $500 as the start, as it would enable you to play bigger time frames like H4 with good SL. And MT4 is the de facto app out there and it's great.

i dont think i will start with 500$ first because im still a student.. and newbie to forex.. i cant afford to lose 500$..

if i were to deposit, who do i deposit to? and how do i withdraw if i earned some money?

Thanks very much

Have you tried demo before? Go demo before you think about going live at least for a few months. And $100 is really very little, I think most accounts require minimum $200.

I haven't gone live yet but most brokers allow you to fund through debit/credit card and can withdraw through the same way also. TT transfer through banks also accepted mostly.