Hello everyone!
Hoping someone could verify that im getting this correctly, and if not could clarify whats wrong
If we deposit 10 000usd and we get 1:400 leverage, it basically means we can play with 4 000 000usd.
So in order to use correct money management we only want to risk 2% per trade, which is 200 or 80 000 leveraged.
80 000 = 8 mini lots
8 mini lots gets us a pip value of 8$.
We then take the 2% that we're actually risking and divide it with our pip value.
200$ / 8$ = 25pips.
So for our trades we should have a max stop loss at 25, is this correct?
We got 1250pips to trade with before we're busto (10 000 / 8 = 1250), or 50 trades. ( 1250 / 25 = 50 )
Thanks for all help in advance!
Hoping someone could verify that im getting this correctly, and if not could clarify whats wrong
If we deposit 10 000usd and we get 1:400 leverage, it basically means we can play with 4 000 000usd.
So in order to use correct money management we only want to risk 2% per trade, which is 200 or 80 000 leveraged.
80 000 = 8 mini lots
8 mini lots gets us a pip value of 8$.
We then take the 2% that we're actually risking and divide it with our pip value.
200$ / 8$ = 25pips.
So for our trades we should have a max stop loss at 25, is this correct?
We got 1250pips to trade with before we're busto (10 000 / 8 = 1250), or 50 trades. ( 1250 / 25 = 50 )
Thanks for all help in advance!