How to calculate risks with high leverage in Forex

Please, I want to know how to calculate your risk when you have $200 with 1:500 leverage.

Forex for beginners

With $200 on balance, no matter how high you are leveraging yourself, you should stick to trading no more than few mini lots at once.

It is highly advised to not use standard lot sizes for mini accounts (1 standard lot = 10,000 units) offered by most of Forex traders, as it is very expensive for a mini account like yours. Aim for a micro lot of 1000 units at stake; this will make your risks in Forex trading reasonable and will allow to achieve some positive performance even if your trading path starts with a strip of consecutive losses.

When you invest $200 with 1:500 leverage, you'll be able to operate with virtual funds of $100 000.
As a happy novice trader, if you open 1 standard lot of 100 000 units (theoretically, because on practice it would mean draining down an account in few minutes), you're putting $10 at risk for every pip that goes up and down... think quickly, how many pips would it require to wipe out your account? The answer is 20. Not so much. Also this 20 will already include the spread paid.

Now, if you open 1 mini-lot of 10 000 units, then you'll be risking $1 for each pip. With -20pips on the position, your account will lose only $20.
(Yet even this is too much for $200 investment, because losing 1/10 of the investment just in one trade means than potentially under unfavorable conditions, where you always lose, you'll be able to trade on total only 10 times or less...)
That is why it is important to opt for micro lots in your case. Micro lot of $1000 units will decrease the cost of 1 pip to $0,10; and losing 20 pips would mean losing $2.
10 cents may sound not so attractive in terms of making big profits quickly... My advice to traders looking for high quick profits, it is better to think about investing more money in the first place.

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Where can I find a broker with 500:1 leverage?

Alpari UK provide 500:1

Thank you.

hi , my forex broker sells my pair Before i run out of margin , example i got 60$ 1:200 leverage , so i get 10,000 units ( which requires $50) so i get kicked out when ballance reaches $35 ,, why do they not wait till its Zero

I still don't see how to calculate the risk or the margin requirement but i'll just put a scenario for you guys as a case study.

i just try out one account funded just about USD 53.44. which i don't know what is the capacity of the leverage.
but recently i just open a trade with 0.01 Lots and the MT$ states that my free margin is USD 39.77 with the other margin in USD 13.67

now my question is how to get to know the leverage of my account?

my other Q is this, how can increase that USD 13.67 to a higher amount? say USD 35 (rather than USD 13,67)

It shouldn't matter if you have hard stoplosses placed on your orders what your leverage is... if you want to calculate how leverage will affect your margin used level check out this calculator which is pretty cool:

It is nonsense to go with a broker that does not provide 500:1 leverage! Here's a whole mess of them:

Hope this helps with those of you struggling to trade freely and get away from those cftc dusch bags!

VantageFX offers 500:1 but you have to reuuest which is a straightforward process, you just reply to an email saying you unerstand the risks of a high leverage and they change your leverage from 100:1 to 500:1. They do US Traders!

Thanks to everyone for their contributions to the forum, someone may recommend strategies or recommendations link indicators of short and medium term, thanks from friends and FOREX :)