I have some theoretical questions

If I happen to buy EurUsd at lets say 1.2000, with 0.1 (10.000) lot, that does mean that I get 12000 Usd from my broker to get 10000 Eur, if my broker has 1% leverage, then my used margin is 120 right? if EU rises lets say to 1.2500, then I sell my 10000 eur to get back 12500 usd right?
What happens if I sell the E/U at 1.2000 with 10.000 units (0.1) ? that means Im buying 10,000 Eur or what? And what about my leverage?

my other question is lets say I got my account balance in GBP 500. I decide to risk 1% of my account. I decide to buy NZDUSD at 0.8000. Seeing the charts I decide to have a 10 pip stop loss. Then how to calculate my correct position size (lot)?
And whats the difference if i sell nzdusd? And with for example EurCHF or GBPJPY? I just want to get it as clearly as possible.

THanks for helping me out !

Happy trading!

attached is a script.drop it on your chart,enter your lotsize/stoploss/takeprofit in inputs window and it will show you the pip value, p/l amount etc.

Thatks Coolleen for the indicator very much appreciated!

However, I would like to know exactly the answers and the reasons if thats not a problem

When you sell 10,000 units of EUR/USD at 1.2000, you are selling €10,000. To do that, you borrow the same $12,000 from your broker and still need $120 margin to hold the position. If the price goes down to 1.1500, you close the short position, but now you have to give back only $11,500 to buy back those €10,000. Your profit is the same $500.

Googling for "Forex position size calculation" would probably give you some really nice answers, but I will try to explain it here:

Your input data:
Account currency: GBP
Balance: GBP500
Risk: 1%
Risk money: £5
Stop-loss: 10 pips
Currency pair: NZD/USD

Additional necessary data:
GBP/USD Ask price: ??? Let's assume 1.5

Calculation:
First, it is necessary to calculate the value of the pip according to the given Stop-loss and Risk money:
PV = £5 / 10 = £0.50

Second, since the currency pair is quoted in USD, while the account balance is in GBP, it is necessary to calculate the adjusted pip value using GBP/USD Ask price:
APV = £0.50 * 1.5 = $0.75

Then, it is necessary to calculate the position size that would yield the given pip value, considering the value of the pip in one standard lot ($10 for NZD/USD):
PS = $0.75 / $10 = 0.075 standard lot or 7500 units of currency.

It doesn't matter whether you sell NZD/USD or buy it.

For EUR/CHF:
Need GBP/CHF Ask price (let's assume 1.4).
APV = £0.50 * 1.4 = CHF0.70
PS = CHF0.70 / CHF10 = 0.070 standard lot or 7000 units of currency.

For GBP/JPY:
Need GBP/JPY Ask price (let's assume 130).
APV = £0.50 * 130 = ¥65
PS = ¥65 / ¥1,000 = 0.065 standard lot or 6500 units of currency.

Hope that helps.

[quote=enivid;6205388]When you sell 10,000 units of EUR/USD at 1.2000, you are selling €10,000. To do that, you borrow the same $12,000 from your broker and still need $120 margin to hold the position. If the price goes down to 1.1500, you close the short position, but now you have to give back only $11,500 to buy back those €10,000. Your profit is the same $500.


Thank you very much ! Yes I got it i Think!

That does mean tha I always borrow the quote currency from the pair ? So if im either selling/buying Gbpusd, eurusd, audusd etc, im always borrowing dollar. and if its lets say gbpjpy im alwas borrowing yen right?

It doesn't really matter what you borrow (that would probably depend on your account currency). What matters is that when you sell a pair, you sell its base currency.