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$1000 to trade forex

  • #1
  • First Post: Apr 26, 2009 2:05am Apr 26, 2009 2:05am
is it possible to trade in forex with $1000 and a leverage of 1 pip to $1?

with a money management of 2% risk trade? 20 pips including spread?
  • #2
  • Apr 26, 2009 2:08am Apr 26, 2009 2:08am
Quoting clayton4115
is it possible to trade in forex with $1000 and a leverage of 1 pip to $1?

with a money management of 2% risk trade? 20 pips including spread?
What do u want hear?

Y or N?
  • #3
  • Apr 26, 2009 2:14am Apr 26, 2009 2:14am
i just want to know the truth, cause if its no, then i can save myself $1000 and not bother trading.
  • #4
  • Apr 26, 2009 2:37am Apr 26, 2009 2:37am
so if i lower my risk to 1%, thats 10 pips per including spread, i won't have a chance on the LT time frames due to retracements and if i trade the 1 min / 5mins its hit and miss.
  • #5
  • Apr 26, 2009 2:52am Apr 26, 2009 2:52am
For one thing, you need to decide where your stop should be, then determine what position size your 2% risk will allow. If you are setting your stoploss at 20 pips simply because that's what your risk will allow, then you're doing it backwards. If your analysis tells you your stop should be 40 pips away and your account won't handle it, then you need to pass on the trade. Stops placed too closely will cause "death by a thousand cuts".

I've read a few of your posts and my advice is to switch to a broker that deals in microlots. It's the only way you can practice proper MM with 1K. With a micro account you can take longer term trades and safely keep your stops a few hundred pips away, if that's what your method calls for.
  • #6
  • Apr 26, 2009 2:55am Apr 26, 2009 2:55am
yes thanks i think mircrolots are the way to go, i dont know if any brokers offer this in Australia.
  • #7
  • Apr 26, 2009 9:24am Apr 26, 2009 9:24am
leverage of 1 pip to $1?
you're doing it wrong.

by 1 pip to $1 I assume you mean mini lots.
To buy a mini lot you need $10000, so with $1000 you need AT LEAST 10:1 leverage.

Yes of course it is possible to trade. Whether or not you make money is up to you.
  • #8
  • Edited 10:19am Apr 26, 2009 9:47am | Edited 10:19am
Quoting clayton4115
is it possible to trade in forex with $1000 and a leverage of 1 pip to $1?

with a money management of 2% risk trade? 20 pips including spread?

I don't know why everyone over complicates money management

Lots = Account Equity * RiskPercent / StoplossInPips / PricePerPip

So in your case

Lots = 1000 * 0.02 / 20 / 1.00 = 1 lot

So you can trade with 1 mini lot at 2% of your account for 20 pip stoploss and be sure you are not risking more that 2% on the trade.

Edit, but only once if you were to lose. So you would be better off going with a broker that allows micro lots with the price per pip set at $1.00, just as Billflet said earlier
  • #9
  • Apr 26, 2009 10:19am Apr 26, 2009 10:19am
Quoting smjones
I don't know why everyone over complicates money management

Lots = Account Equity * RiskPercent / StoplossInPips / PricePerPip

So in your case

Lots = 1000 * 0.02 / 20 / 1.00 = 1 lot

So you can trade with 1 mini lot at 2% of your account for 20 pip stoploss and be sure you are not risking more that 2% on the trade.
This is correct (as always Scott .

I think it should be pointed out that the stop size should be determined on its own and then inserted into the equation. The OP has decided his stop amount like this:

Stop loss = Account equity * Risk per cent / Price per pip / Stoploss in Pips = 20

He has fit his stoploss to fulfill the correct equation.
  • #10
  • Apr 26, 2009 10:22am Apr 26, 2009 10:22am
Quoting billflet
This is correct (as always Scott .

I think it should be pointed out that the stop size should be determined on its own and then inserted into the equation. The OP has decided his stop amount like this:

Stop loss = Account equity * Risk per cent / Price per pip / Stoploss in Pips = 20

He has fit his stoploss to fulfill the correct equation.
I completely agree with this. The stop should be set by the market, not arbitrarily in most cases, and then the lot size should be computed, knowing what percent of the equity one wants to risk on a single trade.
  • #11
  • Last Post: Apr 26, 2009 11:00am Apr 26, 2009 11:00am
Quoting clayton4115
is it possible to trade in forex with $1000 and a leverage of 1 pip to $1?

with a money management of 2% risk trade? 20 pips including spread?
better trade with microlot, that will give a 200pips or so stoploss on a 2% risk trade. Imo.
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