Excerpt: Learn how to manage risk in forex market by understanding the concept behind forex leverage and use Forex4you’s Forex leverage calculator tool to manage risks.
In order to consistently make money on Forex, traders need to follow the rules of money management (MM) and risk management (RM), correctly calculate the trading lot size, pips value and equity required for position opening. Such information is needed to minimize drawdown and reduce the maximum risks. Nevertheless, it is impossible for most beginners to calculate correctly lot size. Therefore, to make the calculation process as simple as possible, Forex4You created Trader's calculator. It can be found via this link.
The trader's forex calculator is designed to calculate basic parameters: contract size, margin, cost of a point, swap amounts. It provides also live spreads and limit and stop levels for all instruments.
Parameters for forex leverage calculator
The trader's forex calculator allows real-time calculation of trading parameters which are needed to control your funds, as well as estimate resources for the possible positions opening. It is very simple to use the trader's forex calculator: for making calculations, you need to specify the account type, account currency, leverage and a standard lot size. Trader should also choose an instrument type among Forex, Stocks, Indices or Commodities. After entering the parameters, it is enough to press the “Calculate” button and the trader's forex calculator will display the calculated values:
which is based on trading instrument spot spice.
the amount of required funds (in the currency of the trading account) for position opening.
Cost of pip
(in the currency of the trading account).
(the difference between the Ask and Bid prices). It is displayed in pips.
(fee for transferring positions to the next trading day). It is displayed separately for Long positions (buy) and Short positions (sell). Swaps are displayed in points and in the account currency.
The calculations made are linked to the current rate of the selected trading instrument, which is updated in real time and displayed on the screen. Traders should keep in mind that when you change the specified input data, the trader's forex calculator requires you to click “Calculate” button to update the calculation results. Online forex calculator is an excellent assistant for those who work with a large number of open positions, especially in cases when transactions are made with several trading instruments with different specifications. Traders should keep in mind that forex trader’s calculator data is indicative (when actual transaction on the trading account is completed, the calculated parameters may differ as the quotes change in real time). But nevertheless the calculator is an effective tool, which helps to reduce mistakes when trading and to save you time due to the speed of calculations.
It is important to mention that there is special MetaTrader indicator, which calculates the same parameters right in the trading terminal. Here are the main advantages of the MetaTrader version:
Easy to use interface with a graphical panel.
Position size is calculated in the same program in which you trade.
Work even if you are not connected to the Internet.
Disadvantages of the MetaTrader indicator:
You need to install MetaTrader.
You need to download and install the indicator.
Not as intuitive as the form of Forex4You trader's calculator.