So you want to understand leverage trading and
what lot sizes to use and how much money to make per
lot size so you've come to the right place and I'm going to show you all the lot sizes and
how to properly use leverage account
when trading the forex markets [music]
hi Your back in the channel my name is Artie and this is
moving average we talk about every
day in trading to keep your profit on a consistent basis so if
you are new to trading and want to understand how leverage
and lot sizes work I will do my best to explain
everything and give you Tools and resources you need to figure it out for
yourself after watching this video but there's
only so much I'm explaining I can do with my hands so
let's move on to the charts and I 'll show you exactly what I'm talking
about so you first understand forex you need to understand
what the point is if we're looking at the most common
The most traded currency pair is Eurodollar current price
is 1.17835 which means that for 1 euro you will get
1.17836 USD the pip is the fourth decimal point so one
two three four this number as It went up or down
one digit so it goes up to four it means it
went up 1 pip so if you want to get 10 pips out of a trade and you're in a long position
you need this price 1.17935
which would be 10 pips profit if you buy At this price now when it comes to lot
sizes there are three lot sizes to consider
there are 0.01 a 0.10 and 1.00 these three
have different names this is a standard lot this is a mini lot this is
a mini lot because it's small so I'm going to show you how much
money you'll make for each lot size
This lot is 1 pip there are online calculators that do this for you
but I will show you if your base currency is usd
with a mini lot the smallest order you can place
on any broker you earn 10 cents per pip so if you get 10 pips
You will make $1 on a .01 lot size and because here that number
is 10 times bigger than a micro
lot the same goes for the amount you
will earn you will earn $1 per pip on a mini lot and on a standard
lot because a standard lot is 10 times bigger
than a mini lot again you can To win it here
ten dinars and larat per pip so let's say you entered a buy position and that price went up to
1.17845 and you had 1 standard lot you would make $10
now you might be asking yourself wow.
Understand but
what is a standard lot like the unit of measure on that
standard contract is 100000 of that currency so basically
to create an order the size of one standard lot you have to have one hundred thousand
of that currency so technically you would need
117835 dollars like physical dollars to buy
A full standard lot of that currency like
actual money and you can see
that without a leverage account which the average person ca
n't do I don't think you have a hundred thousand dollars sitting in your
trading account let alone 95 day traders where it
comes from Leverage role so again a hundred thousand units
for a standard lot 10,000 units for a mini lot and a
thousand units for a mini lot so now you can
understand why we need a leverage account so any money you have
is leveraged by a certain amount in america you're not allowed more than
Leverage one to thirty so if you have one hundred dollars in
your trading account and you live in the US
your leverage is one to thirty max
so instead of 100 dollars buying power
you now have three thousand worth Dr and lars of buying power now if you go to
an offshore broker or unregulated broker you can get ridiculous leverage like one
to two hundred to five hundred I've even seen some
that are one to two thousand don't ever do that mainly if
you have one to One hundred leverage account
whatever money you have in your account you have the buying power 100
times that if you have hu
dollar trading account with one hundred times leverage you have
the buying power ten thousand dollars which means
the maximum lot size you can take is one contract Small again and this sounds
so complicated just because I scribbled all this on this chart
but there are calculators online which I'll link to below there are
free websites just type in numbers and they'll give you the amount of money
in your currency so with a leverage calculator you not only
have more Buying power but you're risking less of your own money
yeah you may only have a hundred dollar account
but you can buy up to ten thousand small units
of that currency so you make more money on your trade
because you're playing with more money on the other end than you
can also Tch Secret more money fast but thats why
we have proper risk management skills which i learned in this video so if you
google any random lot size calculator i use it sometimes
on forextime.com mainly.
pe in like i want 10
pips on euro dollars and i trade with 0.10 lot size my
base currency is usd so i see that from 10 pips on that lot size
on this currency i make ten dollars and it works with
every single currency it says eg usd cad it's less money
because you earn cad dollars and this is where it gets a
little more complicated they're not equal numbers as I showed you in
my example that's why calculators are
so useful so just to show you an example I made a trade Experimental now to do
a different position of lot size pip zero one
pip one pip zero size one you can see this image here and
you can see how many pips the price went down even though I went in a long position
this is how much I would lose
per lot size if you were still watching This video it
means you like it so I would appreciate it if you just hit
the big thumbs button down my face and if you haven't already subscribed
what are you waiting for I appreciate
you guys taking the time to watch these videos and learn and develop
your own trading strategies so great work With my heart, thank you very much and we'll see you
in the next video
