# Currency

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I am new to trading and I am really struggling in terms of buying. I an currently just using the demo to get to grips with everything.

When i purchase and lets say gbpusd at 1.1254 and execution of lets say 1.0, how do I calculate how much I am spending.

Any help would be appreciated.

Kind regards

Edited by MrE

6 hours ago, MrE said:

I am new to trading and I am really struggling in terms of buying. I an currently just using the demo to get to grips with everything.

When i purchase and lets say gbpusd at 1.1254 and execution of lets say 1.0, how do I calculate how much I am spending.

Any help would be appreciated.

Kind regards

Hi, because you are not actually taking delivery of the underlying but rather taking a position on the future direction of the market then it's not so much a case of how much you are spending but more a case of how much you are risking.

So you have decided gbp will gain in relation to usd and are willing to risk £? in the expectation your decision is correct and the market will rise so you will be able to realise a profit.

The £? risk is the number of points of your stop loss on the trade x the position size in £/point and is displayed on the deal ticket.

You will probably not want to risk more than a certain percentage of you total account balance on any single trade, for most traders that will be between 0.5% and 5% depending on your risk appetite.

So if your stop loss is a large number of points away then the position size of the trade will need to be relatively small (and vis-versa) in order to fit within your risk appetite percentage.

1 hour ago, Caseynotes said:

Hi, because you are not actually taking delivery of the underlying but rather taking a position on the future direction of the market then it's not so much a case of how much you are spending but more a case of how much you are risking.

So you have decided gbp will gain in relation to usd and are willing to risk £? in the expectation your decision is correct and the market will rise so you will be able to realise a profit.

The £? risk is the number of points of your stop loss on the trade x the position size in £/point and is displayed on the deal ticket.

You will probably not want to risk more than a certain percentage of you total account balance on any single trade, for most traders that will be between 0.5% and 5% depending on your risk appetite.

So if your stop loss is a large number of points away then the position size of the trade will need to be relatively small (and vis-versa) in order to fit within your risk appetite percentage.

Hi Caseynotes,

Thank you for replying. So is the execution number is the percentage of your investment, e.g. lets say I deposit £100. My instant execution is 0.05 for one order and another order is 5.0. Are they both 5% of my initial investment.

Thank you for bearing with me.

Kind regards

Edited by MrE

Hi

advice is go away & learn

If you do not understand this (the very basics) then how can you expect to make money?

i am not being mean here just trying to stop you from losing your shirt

go away and study for a min of a year pref 2-3 and then have a small go

Neill

12 minutes ago, MrE said:

Hi Caseynotes,

Thank you for replying. So is the execution number is the percentage of your investment, e.g. lets say I deposit £100. My instant execution is 0.05 for one order and another order is 5.0. Are they both 5% of my initial investment.

Thank you for bearing with me.

Kind regards

The reason for the low max % risk is so a string of losses (inevitable) won't blow the account or deplete it to such an extent as to be untenable, to survive is the first goal.

So if your account size is £100 and you are willing to risk 5% on any single trade then your max risk is £5.

If your stop loss needs to be 10 points then your position size should be set to £0.5/point

If your stop loss needs to be 5 points then the position size should be £1/point.

If your stop loss needs to be 20 then you need to be on a mt4 account where position size goes down as low as £0.1/point 🙂

Hey @MrE - we have a number or resources available which guide you through these first steps of spread betting (or CFD trading if you're outside the UK).

Let me know if you're spread betting or on a CFD account and i'll try and give a worked example laying out the 'cost', as well as deposit required to place the trade, and your total notional expo

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