Weekly Thread: Sep. 7 - 12
- Thread starter rezo_s
- Start date
Rezo
I would think the (inflated?) % indicated above could be a bit hard to understand immediately by some new visitors.
Please consider to simply use a net % (otherwise, specifying also net % x Margin ratio). Therefore people can compare it easily, and you can even change your margin ratio if wanted anytime.
Just a thought!
Hi Odd Trader.
Yes, sorry. I will explain. I use 1:4 gearing on each and every trade. All trades are executed of same contract size in order to maintain stability. For example, with 50k investment, I open this trade with 200k position. That's my money management, and as you mentioned, others may use different contract size, and %of target and stop (risk) will change as well. In my example, my trade is of 200k, and if I have stop loss of 89 pips on euro, it means I am risking 89*10$/pip*2lots=890*2=$1780 risk accepted on this trade, and $1780 is 3.56% of 50k, same for target (objective) - its 161 pips, and that's target for $3220 (161*$10/pip*2lots) and $3220 is 6.44% of 50k. That's where
------------------
Stop@1.1120 (89/3.56%)
Target@1.1370(161/6.44%)
-----------------------------------
came from.
In case its a trade on usdchf, usdjpy - and rest - those, price for pip on which depends on pair price (for ex, if usdyen is 116.00, 1 pip is worth $8.62 for each 100k lot, and if price is 120.00, then pip worth is $8.33) - for those trades its also easily calculated.
For each 100k contract the net profit/loss is:
[abs(buy price - sell price)*100,000] / (closing price)
For example, I am holding currently short on usdchf @1.3899, and currently the price is 1.3787. Its 112 pips profit at the moment. So, if I want to calculate the profit at the current price:
0.0112*100,000/1.3787=$812.36. as I am holding 2 lots, its $1624.72, or +3.25% of initial investment (50k) - of course it easier just to look at trading platform and see what the current status of the trade
. But in this manner I can calculate the risk I take for each trade in % and the objective target) of the trade.
Hope this is what you asked,
regards,
Rezo.
Yes, sorry. I will explain. I use 1:4 gearing on each and every trade. All trades are executed of same contract size in order to maintain stability. For example, with 50k investment, I open this trade with 200k position. That's my money management, and as you mentioned, others may use different contract size, and %of target and stop (risk) will change as well. In my example, my trade is of 200k, and if I have stop loss of 89 pips on euro, it means I am risking 89*10$/pip*2lots=890*2=$1780 risk accepted on this trade, and $1780 is 3.56% of 50k, same for target (objective) - its 161 pips, and that's target for $3220 (161*$10/pip*2lots) and $3220 is 6.44% of 50k. That's where
------------------
Stop@1.1120 (89/3.56%)
Target@1.1370(161/6.44%)
-----------------------------------
came from.
In case its a trade on usdchf, usdjpy - and rest - those, price for pip on which depends on pair price (for ex, if usdyen is 116.00, 1 pip is worth $8.62 for each 100k lot, and if price is 120.00, then pip worth is $8.33) - for those trades its also easily calculated.
For each 100k contract the net profit/loss is:
[abs(buy price - sell price)*100,000] / (closing price)
For example, I am holding currently short on usdchf @1.3899, and currently the price is 1.3787. Its 112 pips profit at the moment. So, if I want to calculate the profit at the current price:
0.0112*100,000/1.3787=$812.36. as I am holding 2 lots, its $1624.72, or +3.25% of initial investment (50k) - of course it easier just to look at trading platform and see what the current status of the trade
. But in this manner I can calculate the risk I take for each trade in % and the objective target) of the trade.Hope this is what you asked,
regards,
Rezo.
