On Money Management_MM

MONEY MANAGEMENT

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" Why does InstaForex use 10000 lot instead of standard 100000 one?

InstaForex company gives an opportunity to trade at Forex market using three types of accounts at once: Micro Forex, Mini Forex, Standard Forex. In order to make such a technology possible a nonstandard 10000 lot was established, which at the deal by 0.01 lot gives the point price of 0.01 USD, id est the absolute minimum, which allows the accounts' owners of about 5000 - 10000 to control their risks effectively. At the same time, the lot size of 10000 makes the calculations of point cost convenient at deals opening.

Let's have a look at data below:
0.01 InstaForex lot deal = 0.01 USD pip price
0.1 InstaForex lot deal = 0.1 USD pip price
1 InstaForex lot deal = 1 USD pip price
10 InstaForex lot deal = 10 USD pip price
100 InstaForex lot deal = 100 USD pip price
1000 InstaForex lot deal = 1000 USD pip price

Ease of calculations and the opportunity to combine three levels of Forex trading in one trading account makes InstaForex lots an undeniable advantage of InstaForex trading conditions. "

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Account Size($)	%RER	Max Loss/ Trade($)	Lotsize/ Volume Insta/Others	Max StopLoss	Min Daily Profit Target	Daily Profit (Single Lot)	Daily Profit (Double Lot)
≤$500	4%	$20	0.20/0.02	100pips	160 pips	$32	$64
$1000	3%	$30	0.30/0.02	100 pips	160 pips	$48	$96
$2000	2%	$40	0.40/0.04	100 pips	160 pips	$64	$128
≥$5000	1%	$50	0.50/0.05	100 pips	160 pips	$80	$160

With Instaforex: (NON-STANDARDIZED)        With Other Brokers:(STANDARDIZED)

1.0  lotsize =(1pip)=$1                                           1.0 lotsize =(1pip)=$10

i.e, 100pips=$100                                              i.e, 100pips=$1000

=> $20/$100=0.2lotsize etc                                     => $20/$1000=0.02lotsize etc 

                                                                                     This implies you  should open a micro account

                                                                                So your lotsize will determine the type of account to use.                 If your 2%RER=$100 (Say, 2%of $5000),                                                                                         $100/$1000 =0.1 ==>> Use a mini account.

ð  Choice of volume/lotsize = %RER /  $100          AND                   %RER /   $1000  respectively.

Be  DISCIPLINED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!