the hare
Senior member
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The first thing you should think about is the size of your average losing trade. Lets say its 40 pips or at $5 per pip, 200 dollars.
Then make sure the $200 loss is no more than 2% of your account balance. On that basis, you'd need 10 grand. Realistically if your new to the game, reducing your risk to 1% you'd need 20 grand, or 0.5% per trade 40 grand etc.
The above assumes that you want to make money, you could probably use 500:1 leverage, and open it with a weeks pocket money, but you'll be broke within an hour !
Then make sure the $200 loss is no more than 2% of your account balance. On that basis, you'd need 10 grand. Realistically if your new to the game, reducing your risk to 1% you'd need 20 grand, or 0.5% per trade 40 grand etc.
The above assumes that you want to make money, you could probably use 500:1 leverage, and open it with a weeks pocket money, but you'll be broke within an hour !
trader_dante
Veteren member
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Howdy,
If I wanted to trade $5 per pip on the GBP/USD currency pair, how much would I need to deposit in my trading account?
I'm assuming leverage will play a role in this, but please give me some typical examples regardless.
Thank you
Depends entirely on your brokers margin requirements.
With mine, to trade $5 a pip you would need $300.
Obviously, if it moves 60 pips against you, you're wiped out.
You're new so $5 is far too much. Try $1 instead, even better would be 50 cents.
Chances are at $5 you're thinking about making money which is wrong to start with. You should be thinking about damage limitation because you're going to be making all sorts of mistakes. The key to surviving in this game is experience which of course takes time. The mistake many make is they trade far too much to start with so when they get the all important experience they have generally lost most if not all their money.
But the guy who trades small when staring out, the one who makes all the normal mistakes, well, he's in good stead because a) he's gained the all-important experience and more importantly b) his account is probably down, but not too much because of the small trades.
Good luck anyway.
Chances are at $5 you're thinking about making money which is wrong to start with. You should be thinking about damage limitation because you're going to be making all sorts of mistakes. The key to surviving in this game is experience which of course takes time. The mistake many make is they trade far too much to start with so when they get the all important experience they have generally lost most if not all their money.
But the guy who trades small when staring out, the one who makes all the normal mistakes, well, he's in good stead because a) he's gained the all-important experience and more importantly b) his account is probably down, but not too much because of the small trades.
Good luck anyway.
Joseff
Established member
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Howdy,
If I wanted to trade $5 per pip on the GBP/USD currency pair, how much would I need to deposit in my trading account?
I'm assuming leverage will play a role in this, but please give me some typical examples regardless.
Thank you
0.5 Lot size = 1 pip = 5 $
So you need $500 for comfortable trading, when you have a space for price movement in wrong directions.
ivan91
Newbie
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Well, if you use leverage 1:200, the minimum you must have in order to bet make x5 pip is 250$ - pure math.
However, you`d be far better off if you trade a pip for a dollar instead of for 5 dollars. In this case, you would need 50$ and if you deposit 250$, you will feel more secure and minimize the risk of going bankrupt in a few hours
However, you`d be far better off if you trade a pip for a dollar instead of for 5 dollars. In this case, you would need 50$ and if you deposit 250$, you will feel more secure and minimize the risk of going bankrupt in a few hours
