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Understanding Forex Leverage, Margin Requirements & Trade Size

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Understanding forex leverage, margin requirements and sizing trades for successful trading.
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Leonard Emini (13 days ago)
I didn't understand anything. Will I lose with 1:1000 or with the broker lose money? and how much
Mindy Yost (13 days ago)
Hi Leonard, I'm not exactly sure what you are asking but I will try to answer you anyway. First it is important to understand that there are only two ways to lose money trading forex. The first way to lose is to close a trade when it is negative. People do this every day - and on purpose - by putting STOP LOSSES on their trades. The second way to lose money trading forex is to have a "Margin Call" and that is when you run out of "Usable Margin" (also known as "Free Margin" which is the extra money you have in your account to accommodate the negative p/l that accrues in trades when they are negative. If you trade or trades go negative to where the negative p/l totals MORE than the amount of funds that you have in Usable Margin, the broker will CLOSE YOUR TRADES and force you to take those losses. In a margin call situation, typically your account will still have some money left in the Balance because when the broker closes your trades you are REFUNDED the amount that you put up to be in the trade. That money (also know as MARGIN REQUIREMENT) is the deposit you made when you entered the trade. If you are trading with a 100:1 leverage you would put up approximately $100 per mini lot traded. If you are using 1000:1 leverage you would have put up approximately $10 per mini lot traded. So... if you hit a margin call, you can see that end the end you would have more money LEFT OVER after a margin call if you used the LOWER LEVERAGE. But either way, you would have lost MOST of the money that you had originally put into your trading account. The whole point of trading forex is to MAKE MONEY and I teach people how to trade without EVER having to take losses on their trades and how to NEVER hit a margin call. Check out my website: www.MindyYost.com for information about the classes, workshops and mentoring services I offer. Cheers, Mindy
Facts Land (17 days ago)
Great video. Is there a way before I send any funds to my account to find out if I go for 1 lot (100X leverage) how many pips margin do I have before my position gets liquidated? Thank you
Facts Land (17 days ago)
Thank you for your prompt reply. Really appreciated it. Happy New Year and take care. +Mindy Yost
Mindy Yost (17 days ago)
So, let me understand you correctly... You are going to make a 1 LOT trade? A 1 LOT trade is the equivalent of 100,000 units of the BASE currency - so if you are trading USD/CAD (for example) that would be the equivalent of $100,000. A 1 LOT trade has a PIP VALUE of $10.00 per pip. Next - I am assuming from your message that you are trading with a 100:1 (one hundred to one) leverage. What this means is that the DEPOSIT that you will need to make to open the 1 LOT position will be one one-hundredth (1 100th) of the actual value of the trade - so in this case your deposit required to enter the trade would be $1,000.00 ($100,000/100). So now, you would like to know how soon it would be before your account would hit a MARGIN CALL (or, liquidation). The answer is totally dependent on how much money you have in the account. Let's assume that you opened your account with exactly $1,000.00 - in this case you would be spending the entire balance to open the position and because of the fact that EVERY trade opens in the negative (because of the spread) you would instantly hit a margin call and lose a little bit of your money (would depend on the broker and the spread at the time, etc.) but your account balance would be replenished by the remainder of your deposit to enter the trade. Now, let's assume that you opened your account with $5,000. In this case, to enter that same 1 LOT trade, your account would be debited $1,000 for entering the trade (for the deposit), so your account balance would still have $4,000 left to manage the trade with. If the pip value is $10 per pip, then your trade could go 400 pips NEGATIVE ($4,000 / $10 = 400) before you would hit the margin call - but if it did hit the margin call, you would be left with a balance in your account somewhere near $1,000 - which would be the return of the deposit that you put up to be in the trade. As you can see - it is very important to make sure that you have plenty of balance left after entering a trade to ride that trade negative for a while if necessary before your trade becomes profitable. For more information about how to trade safe, check out my website: www.MindyYost.com Hope this information helped answer your question.
H dutr (1 month ago)
Thank you for your help.
phi vortex (1 month ago)
Hi Mindy, Just found your channel. Will visit your site. Thanks for the above! I am just battling to understand why the margin decreases as the leverage increases. Using a $1000 account as an example and ignoring lot size for explanation purposes: 50X = $50 000 and 100X = $100 000; if the 100X trade went against you by just 1% you would have a draw-down and zero balance - whereas the 50X trade at 1% draw-down would leave you with $500. Is there some standard formula? If so, is it specifically designed to entice one into using higher leverage? Many thanks, Mark, UK
Derron Williams (1 month ago)
Hello. I am opening a live account on fx pro soon, what should my leverage be on a $300 starting trading account?
Mindy Yost (1 month ago)
To make the most use of a small starting fund, you want to go with the highest leverage available. In larger accounts, FinPro offers 400:1 leverage and that is what I would suggest you ask for, but I am not sure if that leverage is available on the micro account. When you make your application, the highest leverage you will see on the application is 200:1, but as soon as the account is opened and funded you will be able to change the leverage to 400:1 (if they allow that on the micro accounts). When you make your application, drop my name as referring you to them - as they like to know that I am actively promoting them. I have been trading with FinPro for several years now and have found them to be great in all respects - maybe the best broker I have ever had. As a side note: I will be doing 7 FREE hedging workshops on Friday, November 23rd (Black Friday) - one session every 4 hours - so go to my website: www.MindyYost.com and you will find the link and schedule of session times. Everyone is welcome - no cost - no pre-registration. Come and learn how to implement hedging to your forex strategy and watch your profits grow!
Baran Malgir (4 months ago)
for gbp/nzd example margin requirement should have been 905.80 dolars not 559.00
Butana Moaka (6 months ago)
Thanks for this video you are the best I will visit your website Now I will check your Videos on your Channel
Lowdavidfilms (6 months ago)
I had to cut the video short busy at work can someone tell me the risks of leverage
Ricardo Zapata (5 months ago)
Lowdavidfilms And thats why you will fail at trading. You need to spend time to do your homework and research by yourself. Not other people telling how and when etc. 🤦🏻‍♂️🖕🤣🖕
Mindy Yost (6 months ago)
Leverage refers to the amount of money you need to "put up" to be in your trade. If you have a "low" leverage, you put up MORE money for the trade than if you have a "high" leverage. Trading with a higher leverage means that you will have move of your account balance available to manage you trades with, but if you trade foolishly and hit a margin call, you will lose more of your overall account balance than you would trading with a lower leverage.
Nate Price (7 months ago)
I found this very helpful may God bless you.
Mindy Yost (7 months ago)
Thank you. I post new videos almost every day on my website. www.MindyYost.com so check it out for even more helpful information about forex trading. I will be teaching Forex Summer School beginning June 10th and that will focus on getting in profitable trades EVERY trading day.
Bestnet Sellers (9 months ago)
Super great video !!! Very helpful
BRIAN GATIU (11 months ago)
you are the best.
Mindy Yost (11 months ago)
Thank you, Brian. I appreciate your comment! Cheers, Mindy
Mindy Yost (11 months ago)
I have uploaded a revised version of this video with much better sound volume. Here is the link to the new video, https://youtu.be/iVpwm-ExKD0 I think you will pleased with the new video. Cheers, Mindy
Mindy Yost (11 months ago)
Several people have commented in just the past few weeks that the volume is really low and - you're right - it is very low. It really was not always like this. I am not sure what is happening, but it seems to be turning itself down little by little every day. But - I am in the process of doing a re-make of this video which should be finished in a few days - so check back next week and the new one should be uploaded. Thanks for letting me know about the volume. Cheers, Mindy
hasan subzwari (11 months ago)
Whole thing is perfect. but i think you need to raise your video Volume .
Rate Me (1 month ago)
Juhász Fujisawa scam
Juhász Fujisawa (3 months ago)
I make a living trading stocks and Forex and also teaching those around me how to do same. One mistake I see people make is getting caught up in the hype surrounding these so calls experts . From my 5 years as a trader I can only recommend *Dmitry Vladislav* 's *Blended Model Strategy* as the most profitable out there. A strategy that has made me well over 700K yearly is a good one. search for this strategy online guys and get more informed how leverage works
DANIEL PROMISE (6 months ago)
yeah that's good but the audio is very poor
Theo Paine (1 year ago)
Excellent video on proper risk management. Simple & to the point. If more folk were to abide by these simple rules, there would be less casualties amongst aspiring forex traders.
Juhász Fujisawa (3 months ago)
I make a living trading stocks and Forex and also teaching those around me how to do same. One mistake I see people make is getting caught up in the hype surrounding these so calls experts . From my 5 years as a trader I can only recommend *Dmitry Vladislav* 's *Blended Model Strategy* as the most profitable out there. A strategy that has made me well over 700K yearly is a good one. search for this strategy online guys and get more informed how leverage works
Mindy Yost (1 year ago)
Thank you Theo for your wonderful comment. It is so nice to know that I can help people understand the forex market. Please spread the word thru your forex friends to check out my website: www.MindyYost.com as I will be posting more videos soon and with more regularity, but would also like to get my subscriber base up to 1,000 in the coming year.

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