"What is our life - the game." And if you play with a lot of money? Each player in the Forex market, whether to begin your trip or an experienced trader, without exception, are obliged to know the types of orders that they will work to further that can make optimal calculate the volume of orders in relation to trading deposit.
There are two types of Forex trades:
- Market order - in this case, the trader sees the quotation and offers dealers. If you accept it automatically closing.
- Quote - Request for a double quote. Request trader Ask / Bid - simultaneous exposure prices for buying and selling.
These orders are working in the Forex market in real time, execution time - a few seconds. There is also a pending order - a request the dealer to perform the operation at a specified price, as soon as it reaches the market: limit and stop. To limit orders on the Forex market trading orders are often used: Stop-loss (for timely closure of unprofitable orders) and Take - profit (to fix the profit).
It now remains to determine the volume of trading lot, which in each case must be determined separately (and even one trader volumes may change during the trading day).
To calculate the amount of the transaction, we first need to determine the price at which you are going to enter the Forex market and the direction of trade, set Stop-loss and Take-profit. To calculate the size of the lot to take into account two variables: the number of points from the Stop-loss prior to entry into the market and interest risk of the deposit (selected individually). Experienced traders advise in any deal to keep the risk of no more than 1.5%, in some cases, 2%, which is guaranteed to protect the players from serious and critical loss.
After that, everything is very simple: the amount of the deposit is multiplied by the percentage of risk and divided by 100. Thus, a sum which can be lost in case of activation of the order Stop-loss. Now this sum is divided by the number of points from the Stop-loss prior to entry and multiplied by 0.1. The resulting figure - is the size of trading lots. For example: your deposit - 1000 USD; anticipated level of foot - 50pp; risk of 2%. Receive in the course of calculations: 1000 * 2/100 = $ 20 - the amount of the loss, $ 20 / 50pp * 0.1 = 0.04 - the size of your trading lot for a single trade. With such a lot of trading orders one point is equal to $ 0.4.
All these calculations are simply necessary for the calculation of the amount that is acceptable to your strategy of trading, as in the case of ignoring these simple calculations your deposit will be subject to greater risks and "subsidence." Especially when highly liquid market and several open orders.