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Attachments: Volume, Leverage, and how they're related
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Volume, Leverage, and how they're related

  • Post #1
  • Quote
  • First Post: Jul 1, 2008 8:35am Jul 1, 2008 8:35am
Man, I've been trading Forex with virtual accounts for about 2 years now, and I'm about ready to go live (next month, if all goes according to plan).

Basically, I want to know how volume and leverage are connected. This is something I've never had to think about before, but now that I'm using real money I want to make sure I understand.

I read babypips, and I've read some beginner Forex books, but I'm still not 100% clear.

I thought leverage was related to how much 1 pip is worth. Like, how much money you're buying in the market with your actual money. But that seems to be what volume is in Metatrader 4, so I'm a little confused.

Anyone wanna discuss this here? Maybe post your opinions/explanations/questions?

Thank you for your time.
Do you think the karate kid knows kung-fu?
At the top of this Beginner section are 3 stickies - read the 3rd one - information for beginners. that should answer your question. In fact read all 3

BTW leverage and volume are different things. No true volume exists for Forex - what you see in mt4 is only for that particular borker.
In trading, there is no bullshit. You either make money or you don't.
Thank you, I should have read those first.

I think what's throwing me off is "volume", that seems to only be found on my Metatrader 4. Demo programs with actual brokers seem to either trade in currency amount, or lots.

...basically I just want to trade exactly like I do using MT4, but using real money.

1.00 volume in MT4 makes 1 pip = $10.00, and .10 makes 1 pip = $1.00

A volume of 1.00 is how much currency?

I'm sorry for asking so many questions =-/
Do you think the karate kid knows kung-fu?
2 more years of schooling for you!
Attached Image
When you do go live, I hope that you become a very successful trader and reap a big trading account.

Good Luck
"To Be A Successful Forex Trader, You Need A Successful Forex Mentor."
  • Post #6
  • Quote
  • Edited at 4:05am Jul 2, 2008 3:39am | Edited at 4:05am
MT4 uses the noun volume in an incorrect way given the normal meaning of 'volume' within a trading environment when they use it in the 'Order Window" like they do.
- Do not pay attention to that - In you mind replace that with "Lot Size"

If you right click your charts and select 'Volumes' you get the lines at the bottom of your chart - these are what are normally thought of as volume in a trading environment. intransitive verb : to roll or rise in volume - ie the rise and fall in number of shares (lots) in a move up or down in price over a given period of time.

An English major will correct me if I am wrong in the usage - but I think you get the drift.
In trading, there is no bullshit. You either make money or you don't.
Quoting mrgreen
MT4 uses the noun volume in an incorrect way given the normal meaning of 'volume' within a trading environment when they use it in the 'Order Window" like they do.
- Do not pay attention to that - In you mind replace that with "Lot Size"
This is what I'm just starting to realize.

Quoting mrgreen
If you right click your charts and select 'Volumes' you get the lines at the bottom of your chart - these are what are normally thought of as volume in a trading environment. intransitive verb : to roll or rise in volume - ie the rise and fall in number of shares (lots) in a move up or down in price over a given period of time.

An English major will correct me if I am wrong in the usage - but I think you get the drift.
Ironically, I was an English major That's probably why I'm so bad at grasping the basics.

So let me run this by you - you can confirm or deny if you don't mind - and then I'll head on back to Forex school.

Margin is like a deposit - then, once you have deposited that, you get your $10 a pip what you see is what you get set up. Is this correct?

For example,

I start an account with $6,000.
At 50:1, I need 2% margin for a trade of 100,000 units - so $2,000.
So, I should basically forget about that $2,000, and from that point on I am free to trade (1 pip = $10) as I need to, within a $4,000 range?

Is that how it works or am I totally wrong?
Do you think the karate kid knows kung-fu?
Quoting ddblue
Margin is like a deposit - then, once you have deposited that, you get your $10 a pip what you see is what you get set up. Is this correct?

For example,

I start an account with $6,000.
At 50:1, I need 2% margin for a trade of 100,000 units - so $2,000.
So, I should basically forget about that $2,000, and from that point on I am free to trade (1 pip = $10) as I need to, within a $4,000 range?

Is that how it works or am I totally wrong?
Not correct - (off topic - but NEVER forget about that 2K its your money).
Spend some time reading the Information for Beginners thread mentioned earlier - posts 18 - 33. I mean really study them. Your answers are right there.
Good trading to you.
In trading, there is no bullshit. You either make money or you don't.
Quoting ddblue
This is what I'm just starting to realize.



Ironically, I was an English major That's probably why I'm so bad at grasping the basics.

So let me run this by you - you can confirm or deny if you don't mind - and then I'll head on back to Forex school.

Margin is like a deposit - then, once you have deposited that, you get your $10 a pip what you see is what you get set up. Is this correct?

For example,

I start an account with $6,000.
At 50:1, I need 2% margin for a trade of 100,000 units - so $2,000.
So, I should basically forget about that $2,000, and from that point on I am free to trade (1 pip = $10) as I need to, within a $4,000 range?

Is that how it works or am I totally wrong?
Best thing to do is to make a risk/trade calculation. If you follow only few pairs and use 1% risk/trade you will never encounter a margin use problem.
I've finished reading BABYPIPS school from preschool to college graduation. It has been said that there is no "volume" to speak of in FX trading.

I use MT4 for my demo. When practice trading and click "New Order", there is that "volume" to "play" with. It was set at 1.00 by default but when I changed it to .05, there is a big difference in my profit (or loss). At volume 1.00 the P&L is really high. The P&L changes is by $10, $20, etc. When I changed the volume to .05, the P&L, that amount near the bottom right on my screen moves only in cents, like .15, 20, 25, etc. or -.15, -.20, -.25, etc.

So I think, if I go live, and ignore the volume setting, there would be a big difference in my trading results. I am beginning to feel uncomfortable in ignoring "volume" by its influence of "volume" in my FX trades.

Can anyone, please, enlighten us about that "volume" in MT4?

Marlowe ...
Quoting mcamello

It was set at 1.00 by default but when I changed it to .05, there is a big difference in my profit (or loss).
Yeah there will be a difference when you trade different amounts!

Quoting mcamello

if I go live
Please don't! At least read the platform manual first to find out what these setting are for!
  • Post #12
  • Quote
  • Last Post: Feb 26, 2012 12:28pm Feb 26, 2012 12:28pm
Quoting mcamello
I've finished reading BABYPIPS school from preschool to college graduation. It has been said that there is no "volume" to speak of in FX trading.

I use MT4 for my demo. When practice trading and click "New Order", there is that "volume" to "play" with. It was set at 1.00 by default but when I changed it to .05, there is a big difference in my profit (or loss). At volume 1.00 the P&L is really high. The P&L changes is by $10, $20, etc. When I changed the volume to .05, the P&L, that amount near the bottom right on my screen moves only...

Congratulations on finishing Baby pips..... Did you pass?

I would highly recommend that you use HIGH volume !
I mean what do you want BIG PROFIT or little profit.

Or if your really smart go on over to the Pitbull thread theres some really smart cookies in their that have 100% profitable trades. But I would hurry before the crims shut it down. It's the best thing going since sliced bread.


Happy Sunday !

Bluesteele
The Best Loser Wins
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