What is FOREX Trading || Pips & Lot Size Explained || BoomingBulls
If SEBI really exhausts the complete margin, as they have announced already, then without market leverage, how will intraday trading take place. And we all have many such questions in our minds. Considering all these things itself, I came to Dubai so that I can start my Forex work comfortably. So, how can you do it. This video is based on that.
Hello guys, my name is Anish Singh Thakur, and welcome to this long awaited Forex series, as you may call it. I will post 2-3 videos more after this. So, you should see this video because, if you are interested to know what is Forex. Let's say you know what it is. How do we do Forex, what's the terminology, what are Pips, what is lot size, what is risk-reward in this, Which timeframe should I use, how much is the leverage in this, 1:50, 1:100, 1:500, how much would be appropriate for me, how all...
why is Forex illegal in India, how can I do Forex legally, and how can I maintain my earnings with Forex as well, what's the advantage of Forex over the stock market. I'm going to tell you all these things in this video. So make sure you have time. Pause this video, give it a like.
And put it under watch later. Sit patiently with earphones on and watch it on a big screen because this single video will give you complete information, You won't have to see four videos. If you are a regular subscriber of this channel then you know how I explain things to you. So I want your full attention in this video. Okay? Alright, without wasting any time, let's start the video. Alright. So, let's start the Forex video.
You were waiting for it from very long. I won't just explain what it is theoretically. I will tell you practically also how you can apply the things.
I will tell you all calculations, what is Pips, what is lot size, what is MT4 and what are brokers like, what challenges will we face, what advantage do we have against the stock market, leverage, everything. But before that I want to tell you something very important. As a trader psychology is most important for trading, whether we do Forex or we do stocks or options. I'm telling you guys in a very simple manner. The most important thing is mindset.
And to make the best mindset, I'm giving you guys a tool. Meditation. Some people don't know how to do meditation, [typing] meditation, if you come here on this channel, this is also my channel. I have launched this video 2-3 days back.
I've got 24,000 views on this and I have 33,000 subscribers on it. And in this series I have covered properly in what way can you do meditation. I have 742 comments. This is a series. I'm going to post meditation-2 video also.
So I want you to please, whenever you get time, come on this channel and start doing meditation. It will help you in trading. Back to the topic. What is Forex.
Forex full form is Foreign Exchange market. What does global decentralized mean. Centralized means like RBI is a centralized bank in our country. Decentralized means everywhere, not just in one country. We call them OTC as well.
Over The Counter market for trading of currencies. Like in stock market we trade Reliance, SBI, Nifty, Index et cetera, commodity, similarly we trade currency in Forex market. Okay? Now this Forex market which is there, is the world's largest market Around 5 trillion dollars, Transaction of 6.6 trillion dollars takes place in this. Forget all that now. Let me tell you directly now.
Let me tell about useful stuff now. Basically what happens. Let me get you on this chart first. Okay? Let me get you here. Let me show you how do Forex pairs look like.
They look something like this. Just have a look. EuroUSD [EURUSD], USD... USDAD, Canadian dollar. GBPUSD We have to trade in these. As in I will buy euro, and if euro rises, I will gain benefit.
And I will short euro, if it falls, I'll gain benefit. Like that. I'm going to tell you in extreme detail. Gold is also included in it. Gold is not Forex, Gold... Forex brokers who are there, they let trade gold also and let trade crypto also.
A lot of brokers are there. I'll tell you about that also. So it looks something of this sort. Their numbers look something like this. 1.2158
1.2634 1.3722 0.9800 USDJPY 10... You have such numbers, as I showed you. Now let me explain this to you very properly that in what way can we use this, okay? So I'll shift the video to my iPad now.
And okay, I shifted it on iPad. Now let me explain you very properly from here. Okay, the page is already cleared. Alright guys. So
firstly what we are talking about, basically what is Forex, I told you that. Foreign Exchange in which we trade currency. Right, okay.
Now what all can be examples of currency? Like we saw euro euro [EUR], USD. So in like how much was it? 1 point... Let me see here and tell you. Yeah right. 1.2158 Okay, this is the price. Now how can we buy this, what can we do, let me clear everything to you.
Okay. Let's start by comparing with stock market. In order to trade in stock market, what do you need to do. You get an account opened in Zerodha or Angel Broking. After getting account opened in Zerodha or Angel Broking, this has become your broker. This is your broker account, this is your broker.
Now this broker has your... you deposit money in this itself. Right? You deposit money, dollars in this, or rupees, and then you do trading also through this, this is connected to NSE. And after doing trading and all you take withdraw also from this, Zerodha.
Okay? It's simple. There are two ways to login Zerodha. On web application you go on website Zerodha.com, or angelbroking.com, or you use the Kite application.
It's called Kite just for name sake, however it's Zerodha application, just the name is Kite, I mean you trade from a broker's software or mobile app, right? Simple, it's absolutely a simple story of stock market. Tthere is a little difference here. What do we guys do here. Here we guys... one MT, MetaTrader, the company named MetaTrader which is most famous company, so we won't talk of others. There is a company names MetaTrader. We use their softwares.
Like you have Kite application, which is only of Zerodha, MetaTrader... we'll use 5 from now, MT5 is a new version of MT4. We are going to use MT5, it's name is MT5. MT5 is such a version... Like can Angel Broking people use Kite? No.
Can ShareKhan people use Kite? No. Kotak people can? No. But MT5 is such an app which is a universal app. MT5 is not your broker. It's just an execution app. How does it look like? I'll show it to you.
Can you see a logo of MetaTrader 4? That's how it looks. I'll explain you in a little while. So now you have to find a broker here. A good broker. What should be broker's quality? Obviously, they should be trustworthy, your payout should be received timely, and it's software should work properly. And second thing, they should provide you a good leverage also. Like in Forex 100 times, 200 times, you get margin leverage of up to 500 times.
Okay? Some people give more, some of them give less. You should never take beyond 500, like 1000, 2000 and all that are, all those are not good, that's obvious, we don't have to use that. You'll end up doing loss by that much leverage. Anyways, so, what we talked now was that we, this... look, this company which is there, MetaTrader, I Googled MetaTrader. This is an electronic trading platform.
And this is the MT5 app. The app would be something like this which you, I have to install. We are going to do trading by this, swing trading or intraday, we can trade in any way we want to, okay? So this is that. It's like that.
Okay? Now let's move to this. Let me get you back here. And let's talk directly about useful stuff, What we'll do.
Okay, what will we do, now we have to open a broker account. I have chosen two brokers. Two brokers I have chosen. Look, I have moved to Dubai, I don't have a problem. I have chosen two brokers because one broker, as in I will do two different types of trading and payout is in different ways. I need some of it in crypto, I need some in cash, some of it I need in my acount.
All things are possible for me. What is possible for you, I'll tell in the next video. In the next video I'll explain you properly that where should you open your account, what leverage will you get, how soon will you get the payout, is it trustworthy or not, how does it work proper, Everything I'll tell in next video. Now let's understand we have to trade how do we trade, let's come to that.
We'll talk about broker in next video we'll open account in MT5. You need to login on MT5, you'll get ID ans password, you login, account is created, you desposit money with broker You won't deposit money with MT4 here but you'll desposit it to the broker. That will reflect here. You'll do trading from here. Where trading takes place? Exchange.
World is a network of banks. It's a very huge network, trading continues there, and everything like the payout this broker itself will provide and give you. So that's how our Forex market works. Now, why Forex. Why Forex, what's the advantage of Forex. Look, first of all, it's open for 24 hours.
It's open 24 hours 5 days a week, from Monday to Friday it's open 24 hours, okay? So, there are no gaps. There are no gaps, When you swing trade in stock market you fear thinking future lot is there, what if very big gap down happens, risk-reward will get spoilt, or anything can happen next day, Gap Down, Gap Up, and many things can... But the market doesn't close here at all. If you have placed your stop loss, then there is no problem, max to max stop loss would hit. So swing trading can be done very efficiently in this.
And I feel we should give it time. We have habit of doing things quickly in intraday. You can do that in this too, you can do fast trading too. Like you may exit in four hours or five hours.
But mostly I will prefer swing trade which definitely... I will do some intra.. as in short-term also and long-term also. But I'll prefer long-term more, I'll do short-term too. So for swing trading, even for small time trading, this is very good because quickly we.. we don't face problem related to stop loss, your stop loss will remain in system.
Okay. Now firstly it's this. This is about this. Second, liquidity. Liquidity means highest volume in the world.
You'll get that in this, in Forex, okay? Now what are the major pairs of Forex? Let me show you. Major pairs of Forex are.. I'll give you my watchslist. It's simple. Let me tell you, euro-USD, Australian dollars, Canadian dollars, okay? Swiss Frank, JPY which means Japanese Yen. These are some major..
Great Britain Pound. Okay? These are some major pairs. They are called major pairs. Then there are some minor pairs. And then third ones are exotic pairs which are like U.S, Indian rupees, exotic. Exotic means
volume remains low in that. Anyways it's sufficient enough to trade. Okay. We learnt this also now. Now I've told you what is the advantage of this. Advantage margin, leverage, we get a lot of leverage in this.
What kind of leverage do we get? 100, 200, you get leverage of up to 500 times. We guys get it, okay? Leverage is a very big advantage. Disadvantage is only one. Although there is no disadvantage of this. There's just one disadvantage for we Indians, that we legally..
I had made last video about it, I had paid by crypto to a broker. He accepted the payout, but never gave it to me in this. Now I'll receive it here as my account has opened here. Because when I asked for payout, then he sent payout to ICICI Bank.
ICICI Bank rejected it. In India you can't take payout this way in your bank account directly from Forex company. Look, trading, you are doing trade online.
Internet doesn't belong to any specific country. Isn't it. That's obvious. Internet doesn't belong to any specific country. You can definitely do anything online. But when you have to ask for payout in the account, look I gave in crypto. I thought I'll receive in crypto but I didn't.
That money got stuck. But as I moved here, I will receive it. Let's talk about how you can go about it, how you can deal with it. I'll talk about this in the next video. Anyways. Now I want to talk to you guys regarding this number.
Now in order to do Forex trade we need to know technicals of Forex. What technicals are important to know? It's important to know these technicals that how.. as in what are these numbers. Let me get you back here. Okay. Let me get you back here, and Okay. Now
what's the status in India? The status in India is such that you can do Forex trade in India only in these limited pairs. How many? Look. Like if you'll write USD here, then look, so many Future, Options came up with INR. Similarly, if you will search euro, then it will come with euro also. Look euro came right? In this if you write JPYINR then also it will come, JPYINR came. And another one that will come is GBPINR.
GBPINR. Four pairs are allowed, but it closes at 5 o'clock. Gap came, what does it mean So, this is not the real Forex. And volume is also different in this which Indian people are trading. They used to say, but they got euroUSD also but even though they have, I won't get the real volume. EuroUSD is not seen in Zerodha, I think it's not even there.
So these four pairs are there which you see in Zerodha under currency. But these pairs that are there, USD, EuroUSD, USDCAD, okay, how do you read this? Euro is the base currency and USD is the secondary currency. So euro is the main over here. When euro goes up, let's click.
If euro, euro moves towards higher side, then I will earn money. I will earn if I'm bullish and if I have bought. And USD, USD will be weak, euro will be strong, then I'll be able to earn money when bullish. It's a simple concept. USDCAD, Canadian dollar.
GBPUSD, Pound USD, Australian dollar, U.S dollar. Australian dollar, U.S dollar, Australian dollar, Swiss Frank, New Zealand dollar is a major pair.
BTC, BTC is not a currency, neither is XAU. Gold and crude oil are also not a currency. But these brokers who are there, are assets that are open 24 hours. Gold, BTC, crude oil, trading happens on them too, happens in our country, too. They close commodity market 12 midnight. You can trade commodity also by this market with that broker where in order to trade gold, all the commodities, in fact you'll get some foreign markets also in which I'll suggest you brokers also. EuroJPY, This is Dow Jones, I analyzed it.
This is of no use. These are all minor pairs, EuroUSD, EuroGBP, EuroJPY, USD... So I have a limited watchlist like this. I will share more with you.
So these numbers which are written here guys, how should we understand them. How do we understand them. Look right now 1.21579, look, 576, 573.
571, can you see? How such small change is coming. 568, 571, 569. How should I... money... Here it is simple.
What you have to do in Indian market, in Indian market our work is simple. What yo've to do in Indian market? The more money increases, that is my profit. Here, we calculate, like Bank Nifty is simple. If I have bought BankNifty Futures, and my BankNifty from here, my BankNifty from here, it's simple. I short from here till here.
So I, 400 rupees per lot, as in, I will earn 429 X 25 on one lot. This is simple calculation in rupees. Here it's a little different.
Here we talk in Pips. What Pips, what is Pips. So, Pips, if I will talk about Pips, this means Price pecentage in point or price interest point.
Definition explains nothing much. Each and every movement which takes place here, let me show you. Let me open 5 minutes timeframe here. The movement here, this is scale.
When I get on scale from here till here, then this scale is telling me that what, how many Pips are these. One minute. This is the scale. If I want to know from this point till this point, till here, so these are 18 Pips of mine. Now how should I convert 18 Pips into money? Understanding this is a task. Let me explain you that now.
That is very important. Let's start understanding what are Pips. Okay alright. Let me get you back on the iPad. Let me get you here, just one minute. Okay. So,
guys, Pips means which.. look, firstly the four digits that are there after 1 point, digit number, this is digit number one, 1, 2, 3,4. After decimal fourth number that's there, this is one pip.
We'll consider it as one pip, as in 0.0001, this is one pip. Let me explain the meaning. If it changes suddenly to 1.2168, no, let's not do 68, if it changes to 59, how many pips increased? 1 pip increased. I'll teach you later how to convert pips into money. Understand Pip now.
If 1 Pip, If it increases and suddenly becomes 68, then? how many pips increased? We came 10 pips ahead. If it increases and becomes 1.258 the how many pips increased? Look, 123, 100 pips increased. So its a simple funda to calculate pips.
There is a scale given there on tradingview. Juts measure scale and its done. But if you want knowledge, then you have to understand that if in this, that if in this if in 4th point, 1.217
it became 9, then how may pips increased? 10, 20, 10, 68, 20, 78, 21 So there is movement of 21 pips. So this is called pips, okay? So the fourth digit is called Pips. if you ever see a 5th digit anytime, like 9 is written, just ignore it. Why you've to ignore because its such a small value that you don't have to consider it in any case. So you always have to go with 4 digits and the last digit that's there that represents one pip.
Okay, this is ones, tens, hundreds, thousands. So now you guys must have understood. And we don't even count 1, we directly say 2158, 2156, in this. Okay. Let me take one more example.
I'm taking example of USDCAD now, okay? USDCAD. USDCAD, this is going on currently. It's showing 1.26269
What is 9? Its showing 9 like this. So what do we have to do firstly? We have to consider up to four digits only. We don't need 5th and 6th digit. We have to consider till 4 digits mainly. After this, if movement increases suddenly here and becomes 2634, then how many pips movement increased? Check once.
We got movement of 8 pips. So fine. I hope you would have understood pips. That 4th digit is called pips. And now I'll show you conversion of pips into money. I'll show how can we convert this, okay? So I will... just one minute.
Let me share my mobile screen with you so that wi-fi, I am connecting BoomingBulls. Okay. Now I'll share my mobile screen with you.
Let me disconnect this. Okay. Just a minute. I don't think so that, I guess I'm facing this problem, one minute, let me disconnect.
Okay. So we have connected now. I opened MetaTrader5. This is a demo account and not a real account. I haven't logged in on real account.
I'll do everything. I'll create an account directly in front of you in next video. I'll show you how much I deposited, how did I do it. So these settings.. this app is named MetaTrader5 okay?
MT5, that's how you find it, MT5. After coming here, we'll come to new account. And here we do, here we search directly, server etc. and all. So you start getting company names like this. So you add your account here. However this is a demo account.
You can always check demo. Look, demo is written on the right. Demo is written. Okay. Now this is demo number.
Now its showing your balance on the trade screen. This is showing codes to you, what's euroUSD right now at, what's GBPUSD right now at, right. Like we.. this is showing us our chart.
Now we guys don't need to see this chart, that's obvious. This is showing us 1-1 minute chart. We can change minutes here.
We can do this and get this here, we can put indicator here. But you don't need to do all this. Where do you have to do complete analysis? You have to do it on tradingview.com. And you have to come here. After coming here you have to buy a trade I want to trade, I want to buy trade.
I click on trade. Guys now, here what it says, stop loss is simple, we'll put it. We'll put the target. You have to leave deviation, you don't have to touch it. This what you see here, this, what is this? Now, firstly there were no rupees there but pips.
Now here it's not asking for quantity. This is asking for lot size. What is this? You get a chance to enter lot size here. Do you want to buy one lot is it? Or you want to buy 0.1 lot, 0.1 appears very less, but no,
let me tell you what 0.1 means. Basically one lot means hunder thousand (100,000) If its one EuroUSD then we guys are buying 100,000 euros. So this.. and, reduce it. 0.1 means 10,000 But leave all that. What does one lot mean.
If I buy one lot, okay, let's remove this, no stop loss now, and if we want we can target without stop loss. If I buy it in front of you, buy, so I bought it. I bought just one right now. So as and when movement appears in this.. I showed you my trade has been placed. Suddenly I get here, look, here also my balance reduced, my margin reduced.
Okay, we bought this. We come on trade and select one lot. I am buying 0.1 lot of this. Separate, 0.1 Okay? I bought 0.1
Now look, it started showing profit also because it started rising upwards, look, that's visible that euroUSD is going up, and go, and, okay, I want to add more, I want to add gold, look, it gives us guys option. You can add metals also if you want to. Gold, silver, okay. You can add crypto also, you get so many options. Okay. You can add index,
Australian, S&P 500, U.S market. You can add energies, brent, oil, crude. Okay. Like this,
cotton etc. So we can do a lot. We come on Forex. Suppose we want to add Singapore dollar, we add it. We click on plus, and that gets added. Where is it? Singapore dollar came down in quotes.
if we want to buy this, so we take 5.. we take 2.5 lot. Okay, coming back to the topic.
Look, because we selectdd 2.5 lot its showing loss of $26 in it. This we bought one lot, its showing profit of $2 and where we bought 0.1 lot, in that also its showing so much profit. Means in USDCHF right now there is not so much growth.
So USDCHF, see, look, USD, we'll click on chart. Just now this market has started increasing, look. Where is it, let's click on this. We have bought here, we had bought at this point, look, at this point. Market has given a bullish swing right now, like that.
That's how trading takes place here. From this app, we, look, we should do charting on tradingview. But if we want to put stoo loss, target then we'll have to put stop loss, target as per this chart.
Okay. So I showed you the interface. This is a demo account. We can trade in this manner. Like this we can.. I've opened it. We can close it too. We want to close it, its giving option to close, so close it. You close it.
I'll keep closing all trades, close them Close them. They are closed. Close this too. Close this. I clicked buy by mistake. Its closed.
So all of it appears in my history that today I did this, I incurred $21 loss today. This is as I showed you immediately. Basically what did I do this? For you, to show you that the value that's here is as lot size. How you have to enter this lot size
is what I will explain you right now. That how you can choose the lot size okay? Just one minute. Okay. We understood pips just now.
What is pips guys? Fourth digit after the decimal is pips. Now we have to convert pips into money, so first of all you'll have to understand that what is one lot size and how does it work. So firstly, let's start. If lot size is 0.1 then in that, in movement of one pip how many dollars would be made is what we want to know. Then only and only, this point that's there, you have to shift it here. Which means
you have to make it 1.0 Then this will convert into dollars. What? Let me explain again.
If lot size is 0.2 then.. it's 0.2 then what do we have to do? If we want to convert it into dollars then we have to shift this decimal just one point ahead. So how much is it? What do you think? 2.0 Which means $2 So on one pip movement $2 will move.
I'll explain it, it'll become easier then. Let's take more time. If I take one full lot size, one lot size as in? And who can take one lot size, I'll explain that also to you that how..
who'll take one lot size, who'll take how much. We'll take according to account size. If my lot size is one lot, What does 1 lot mean, It means 1.0 lot right?
What does 1 mean, all of you know this basic thing. By 1 I mean to say 1.0 It's 1 lot, so we have to shift decimal one point ahead. What will convert into dollar as? 10 dollars.
On movement of one pip you get $10, you get $20 on movement of two pips, 3 pips movement, $30, 5 pips movement, $50 10 pips, $100. 100 pips, $1000 So you make a $1000 whenever 100 pips movement comes and if you have 1 lot. 1 lot is called standard lot.
Suppose I am using 5 lots, then? Then, you calculate, Move one zero ahead of 5, there will be $50 movement at each pip, on every pip. Suppose my lot is 0.65, then? We can put any point we like. We can put 0.05 also. So what we have to do? Shift the dot ahead. It'll come in dollars.
So $6.5 on each pip will be my profit or loss in any case. Suppose my lot size is 0.01, then? Then put a zero here. What is it? 0.1, which means $0.1,
movement will come according to 10 cents. According to cents, 1 cent 2 cents, that way. Okay? Let's try one last thing. Then you'll get it. Let's take a real example. We'll understand properly by taking a real example. Suppose my lot is 2.35, then..
if I have taken that lot, then what will happen. Add one zero here. So movement of $23.5 will come on each and every pip.
It's that simple. I think I explained it to you well. Now let's take a real example in this.
Let's understand how will risk-reward ratio be like. Okay. Let's assume I have one... I have to take EuroINR here.. it has already given double bottom pattern. Okay, Which timeframes do we use in this? Like in stock market we take Indian timeframes daily, hourly, half, 30 minutes, 15 minutes, 5 minutes, in this we don't see 5 minutes.
The way to see here is that you open daily chart, okay? You open daily chart and take a picture that okay market was in an up trend. There can be a pullback, then again it can start an up trend. 2 Then we open timeframe of four hours.
Four hours is a very important timeframe. Let's see what market is doing in 4 hours timeframe. There was an up trend, trend line broke, it has gone, now it's moving up. Okay, no problem. Still I can see a trend line breaking.
And a retest is also done, I'm finding the market bullish. Actually I did from my other mobile.. I have bought EuroUSD from my other account too, I'm already in buy trade in this. I'm already in buy trade in this. Already. Look, we can see this. What else can we do, if you open 1 hour timeframe, when you open 1 hour timeframe, what are you able to understand.
You understand by seeing that here also in market, inverted head and shoulder pattern kind of thing has been formed here and there are greater chances of it giving breakout here. You do this and do analysis in this. Look, I use indicator very less. I do use moving averages, I will make a separate video about technicalities. Right now I'm taking an example that let's assume, this looks like a very nice buy to me. I feel this is a very good inverted head and shoulder patterm here, and it has given breakout.
So If I want to buy here now, let me initiate long trade here, long position. Let me buy this here and I want to make my target up till here. It's a swing trade till here. Till here, that top which is there. And I want to put stop loss below this recent closed, here. Simple. So this is my plan.
So look what is risk-reward, it's 2.5 We never have to do trades which are below 1:1.5 And swing trade should definitely be above 1.2
It should rather be 1.3 But still it's a good trade, there is a good opportunity here. So how many pips target we have and how many pips stop loss is there. If I would want to know this way, I will take this.
I will click exactly at this point. And I will get it here and see this, this. How much is written? How much? 23 is written. So I will show you on the iPad now. I am writing here in this EuroUSD trade the stop loss is 23.9 pips. Let's consider it as 24 pips, okay? My stop loss is 24 pips.
How much is my target? I will take this scale again like this. Firstly I will click outside. I will take scale exactly at the point where I have bought.
How many pips is it showing? Let's take it as 60 pips, okay? We call targrt TP here, take profit. I have made it 60 pips. After making it 60 pips, my targ.. has hit. I have placed my trade. It's on right now.
Now, now what we have to do? Now we have to understand, now we have to know money calculation. Now to understand money calculation let me come back on the iPad. Now let me make a standard rule & give it to you according to account size.
If account is of $1000 the 0.1 is your standard lot. When I say 0.1 lot how many dollars will change on every pip? When increase one zero? $1, okay? $1.0 So $1 on every pip. You always have to remember this number.
If the account is of $10,000 then, 1 lot is your standard lot. Okay? So how much movement will be there on every pip? There will be movement of $10 You don't need to remember anything else apart from this. Just remember two things, 0.1 for $1000 If account is of $2000 then 0.2 $2 on every pip. If account is of $3000 then 0.3, $3000..
$3 on every pip. If account is of $7000 then 0.7 But I will tell you how many lots will I take.
I just want to make you memorize it. Memorize this thing. Understand this a bit. I will use it and give it to you.
You can change the lot size. It's not mandatory you have to stick to this, you can increase it. If the account is of $10,000 then 1 lot is your standard number that I have 1 lot. Always go for 1 lot each. If you want to take 3 lots, take them one each. But there is a way, I'm telling you.
If account is of $10,000 then I will take one lot. I know one calculation that I will earn $10 in one pip. If account is of $25,000 then my standard lot is 2.5 I earn $25 on every pip, okay? I have taken one standard. Now I'm considering a standard that we have $1000 ..
I'm thinking to start with $10,000 account but I'll see. But as of now I'm working on a $1000 account, okay? Till the time I don't gain more experience in this field. So let's talk about a $1000 account in order to make you understand.
So one, 0.1 lot, okay? Account is of $1000 and these are my calculations. So how much is my risk.
Because my account size is $1000 my lot size will be 0.1 Okay, now this account is of $1000 then if I put stop loss then how many dollars on one pip? So loss is of $24, it's simple. And I'll get the target, so target is of $60 That's good, risk-reward ratio is more than 1:2 So my profit and loss got converted into money. Suppose here my account size, suppose here my account size, was of $5000 then what would my standard lot size be? 0.5, means $5 movement on every pip.
So in 24 pips, 24X5 60X5, do 24X5 loss would have been of $120 and profit would have been of $300 if my account size would have been $5000 So this is a simple calculation. Now let me make this even better for you. I say that let's set it. If our account is of $1000, we are getting lot of leverage in this. The broker that I will give you with that you'll get leverage of upto 500 So leverage is of 500 that means from $1000 how much trading can you do for, multiply it once.
5000, 50,000, upto 5 lakh dollars. Means upto 5 standard lots you can buy in this account. You can buy, but if you buy and stock is small, our account will blow.
That's the problem in Forex. You need to make some deposit in Forex, you get full leverage, you account blows immediately, in little bigger movement. That's why you don't have to do stupidity.
I am telling you exactly how you have to do the calculation. I have set that I... $50 I don't want loss above $50 Okay? In one trade.
How many trades can I take together? I can make two to three trades at a time. I will suggest don't go above two as a starting. Don't go beyond two trades. And set risk per trade.
Above $50, means above 5% I can't incur loss in one trade. And if I make profit, I'll make that of $10 or $100 or $150 or $200 That's how you have to plan. So I fixed it. Okay. So now what is my lot size? It's 0.1 So how much will be the loss when stop loss will hit? It's simple, $24 Okay. This means $24
So here you multiply by two. So take 0.2 as lot. If stop loss hits anyway then stop loss will be of $48 So you increase your position this way. If value of stop loss is less, suppose stop loss here is only 10 pips, then even though your account is of $1000 your account is of $1000 and it's 10 pips. So loss is of $10 if we take lot of 0.1
And I have kept my limit as 50 So tell me how many lot can you take. 0.5 lot You will take 0.5 lot and stop loss will also hit then loss will be of 50 only. So you have set risk per trade as per money management. That this is how you have to increase lot and decrease as per the situation.
Means you have to set a standard in your mind that bro, it's 0.1 for $1000 and 1 for $10,000 and according to that you fix that my loss is 5%. Suppose my account is of $10,000 then I can afford loss of $500 only. So for 10 pips if I.. if I get stop loss of 10 pips then how many lot can I take? I can take 5 lots right? So I will take 5 lots, movement in one lot is $10 So 10X10 into 50 sorry, 50 Then loss would be $500 only.
So you have to change this way. Alright. I... I hope I explained you well what are pips exactly, in what way we have to... and the trade I took.. It's 1 hour timeframe right now, that's it's not visible. Let's open 5 minutes one. You'll understand exactly what's happening in our trade.
So anyways, I hope I explained you well that what pips are, how many pips movement is there, how much pip has increased from here, from where we have bought? Now we have earned 6 pips. If my lot size is 1, then 6, so how much, I have earned $60 profit in my account till now. $60, how much is that, calculate, 70, it's around 4000 rupees.
Profit is around 4000-5000 right now. Okay. So anyways, guys, I hope I told you money management, its risk-reward ratio, what are pips, how to do technically, rest of the details I'll make in next video.
We can't make video so long in one go. How should we use strategies, in Forex which broker you have to use, how you've to take payout, open account, I'll tell all that in next video. Alright. I hope you all understood what exactly is Forex, what are its benefits, what are its disadvantages and how can we use leverage from this and earn money, okay? Okay guys, now you wait for the next video where I'll get complete information so that you guys also start it. Okay, you guys also start doing Forex trade, okay? Okay guys, thank you so much. And I'll see you in the outro video.
Alright, so you saw the video. I hope you would have enjoyed a lot. You'd have felt positivity that it's good, I have encountered something new, that that we can do Forex too, right? Now in next video I'm going to show that which broker should I choose. I've chosen two brokers, I won't disclose their names. In the next video I'll tell their names also, show you the website also. I will create entire account, take trade, do live trade, exit, take payout in my account, full leverage, I'll use everything and show you.
Please have some patience, don't be in a rush. Give me some time. The moment I will launch next video look, most important thing in choosing broker is how much margin it is giving, okay, will margin be good, and is analysis goodm then marging.. look, marging is a doublee-edged sword. You can stab the other person and get hurt yourself. But if analysis is good then you have good margin, that's good right, your capital.. your capital problem gets solved.
You don't need 100,000 dollars or one million dollars. You can do trading with less amount also. So which broker you have to get, how will that broker be, I will tell everything in the next video and explain properly, the one I trust. Look, main thing is leverage and payout. it should give payout timely, company should be trustworthy. And obviously it should be fast, So the new broker which I am going to get is MT5, the one which works on MetaTrader 5 application, that's the broker, okay so whatever it is, I'll tell you in the next video.
Till that time please watch this video properly. And if you like this series, if you want me to show more things in Forex, explain you and tell you guys, I want you to like this video and share this video as well. And yes if you are new to the channel please subscribe. I don't have to say this though, but now I have to. Because without saying some people don't right? They don't. You are watching the video, but forget to like. So please
give me, give me your response how you liked it in the comments section as well. And yes you can questions as well if you have. I'll try to reply those questions as well, okay? Okay guys. Bye. I'll see you soon in the very next video. Bye.