The Main Concept
You are free to open as many lots as you want and have as small/big deposit as you like. Use the following calculations only as an example and our view of possible recommended levels of trading. Each currency pair available on this site has its different recommended deposit level (aka the most appropriate leverage for trading). In general, we tend to use 12:1 trading leverage. If your account covers leverage higher than this level, you are well configured (you may have 1:100, 1:200 or 1:500 leverage). Moreover, you may trade with micro, mini and standard lots. The lower the leverage you use, the less risky your trading is. All recommended levels are scalable and easily calculated. If it is recommended to open 0.01 lot for every $100, you may open 0.1 lot for $1,000 of your deposit and 1.0 standard lot with $10,000. Trading with higher risk exposure may lead to a full loss of your account's equity. There are neither requirements nor obligations to follow the recommended deposit levels. All the information is provided for an informational purpose only.
How much value is a pip? This is the most popular question. Depending on a currency pair and the number of lots you trade the value of a pip will vary. For the purposes of illustration, we will consider trading with 0.1 lot (10,000 units). Your profits and losses are received in the second currency of a currency pair (in EURUSD you receive results in USD, with GBPJPY in JPY, with GBPCHF in CHF, with USDCAD in CAD, etc.) If you trade any currency pairs with the USD being as the second pair, 1 pip always = $1 (e.g. if you trade EURUSD, GBPUSD). If you trade a currency pair with the second pair different from USD, then you have to covert this currency to USD. For example, in the case of GBPCHF, you will have to covert CHF (Swiss Franc) to a currency you are interested in. When you trade with a broker, all these calculations are done automatically by a broker.
The following legend will help with the table: MDD - maximum received so far drawdown in pips and relative to a recommended deposit; RRL - recommended allocation of an equity for a trading instrument; MPL - the maximum possible level of risk. Trading with higher values is extremely unsafe; MED - maximum expected drawdown which may occur during trading in pips.
|
0 pips / 0% |
$2500 for 0.1 lot each pair |
$1750 for 0.1 lot each pair |
800 pips |
|
USD CAD EA MT4 |
-303 pips / -35.6% |
$850 for 0.1 lot |
$700 for 0.1 lot trading |
300 pips |
GOLD |
-444 pips / -23.4% |
$1900 for 0.1 lot |
$1500 for 0.1 lot trading |
650 pips |
GOLD MINI |
-372 pips / -19.6% |
$1900 for 0.1 lot |
$1500 for 0.1 lot trading |
650 pips |
|
-309 pips / -19.3% |
$1600 for 0.1 lot |
$1300 for 0.1 lot trading |
500 pips |
GBP JPY TREND |
-586 pips / -32.6% |
$1800 for 0.1 lot |
$1600 for 0.1 lot trading |
600 pips |
|
-282 pips / -17.6% |
$1600 for 0.1 lot |
$1300 for 0.1 lot trading |
500 pips |
|