# LEVERAGE & LOT – EXPLAINED

THUMB RULE
» Why LEVERAGE IS NOT IMPORTANT TO TRADE WITH US BECAUSE WE RECOMMEND MAXIMUM 1:100 Leverage to 1:200 Leverage which is provided by all brokers.

» Our predefined strategies help our traders to choose lot size according to their capital. At ForexTrade1 each client is well-informed about the calculated risk associated with each trade.

1st case

If you invest \$100 and RISK or PIPS or STOP LOSS = 10 pips from entry point

We will tell you to keep Loss maximum 10% of your invested capital (which is \$100)Explained Risk Leverage be \$10

Q1. How will you do that?
A1. By selecting lot size only

Q2. What to select, Lot or Leverage??
A2. Leverage is least important as you are managing your risk and capital based on Stop loss or pips and by selecting your Lot size.

Calculation
As per rule 10% of loss = \$10
0.1 lot can be traded with \$100
1 pip value = \$1 Profit/Loss
10 pip risk = \$10 loss maximum

2nd case

If Risk or STOP LOSS = 20 pips in given call

» Q. How you will calculate Risk?
» A. By selecting Lot size only.

Calculation
As per rule 10% of loss = \$10
Lot size we can reduce to 0.05 lot
1pip value = \$0.5 Profit/Loss
Lot size reduced to half from 0.1 to 0.05 due to increased Risk from 10 to 20 pips

CONCLUSION

So no need to worry about leverage 1:100 or 1:500 as a trader can choose and can control trade using lot size, and we always keep RISK maximum 10% of invested capital so that Risk and Reward pattern is maintained as per our given strategy