Hello dear friends!
By the numerous requests of novice traders, today I will talk about how to use the trader’s calculator correctly. As an example, we will use the online calculator developed by InstaForex, which can be opened by clicking on the link. Here you will see an explanation why InstaForex uses a lot of 10000 instead of the standard 100000?
InstaForex Company provides an opportunity to trade on Forex using three types of accounts at once inside one: Micro Forex, Mini Forex, Standard Forex. In order to make such a technology possible, a non-standard lot size of 10,000 was introduced, which in case of a 0.01 lot transaction gives a price of 0.01 USD, that is, an absolute minimum that allows account holders up to 5000-10000 to control their risks as much as possible. At the same time, the lot size of 10,000 makes it convenient to calculate the value of the item when opening transactions.
As you can see, when using installs it is very convenient to calculate trading risks and the value of a pip for the main currency pairs with USD in the denominator. For example, a change in the price of EUR / USD by 1 point is equal to $ 1. Those. having opened a 1-lot Eurodollar purchase and having waited for the price movement in the forecast direction of 100 points, we will earn $ 100.
In other cases, the value of the item can be found in the calculator of the trader. For example, for the USD / JPY currency pair, a change in the price by 1 point will lead to an increase or decrease in profit by $ 0.9 for a transaction whose volume is 1 lot.
But the calculator will bring the most benefit to traders who trade on bonus accounts opened as part of the “Bonus for posts” promotion.
As you probably know, the ForexMoney forum encourages users to communicate by adding bonus funds to ruble accounts, thereby providing the opportunity to try to trade on Forex without investing your own funds. But you should adhere to the recommendations on loading a deposit, namely:
8.4.4 Opening positions using the entire deposit or its significant share. The recommendation is not to open positions of such a volume that would immediately lead to a decrease in the “Level” indicator in the trading terminal below after opening :
100% for an account with a leverage of 1/100;
200% for accounts with leverage 1/200;
500% for an account with a leverage of 1/500;
1000% for an account with a leverage of 1/1000.
Lowering the Level indicator below the above values in the trading process is not a violation of the recommendation.
Therefore, to calculate the maximum allowable volume of a position to be opened, it is best to use the algorithm below.
- Click on the link to open the trader’s calculator.
- From the drop-down list, select a currency pair (for example – EUR / USD), set the leverage of 1/100 and the deposit currency RUR. Please note that the recalculation of the parameters is not automatic, but after clicking on the “Calculate” button.
- Now, using the exhaustive search method, select such a transaction volume so that the deposit does not exceed the size of your deposit.
For example, for a deposit of 5,000 rubles, the maximum transaction volume in EUR / USD should not exceed 0.73 lots.
Also, the trader’s calculator can be used to determine the range of the open position.
Because at InstaForex stop-out occurs at the moment when 10% of the deposit is left on the client’s account, then for calculating the power reserve it is necessary to use the formula:
(deposit amount – security deposit * 10%) / item value
Those. for the above example, the power reserve is 107 points:
(5000 – 4951 * 10%) / 41.88 = 107 pp
I hope the information in the note was useful to you. If you have any questions, I will be happy to answer them in the comments.