What is the Pip Resistance of a Micro Account?

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Happy Sukmawan
14 Jan 2016, 09:26 3,818 Views
About pip resilience. I use XM micro account, with $10 fund. if trading with lot 0.01 or lot 0.10, what is the pip resilience? thank you

1 Answer

M
martin 20 Jan 2016, 04:41

@ Happy Sukmawan:
Its durability depends on the leverage and the currency pair you are trading. The higher the leverage, the smaller your margin or collateral, so the greater the durability. As for currency pairs, XXX/USD pairs (e.g. EUR/USD, GBP/USD) have a different value per pip than USD/XXX pairs (e.g. USD/JPY, USD/CAD).

I assume you are trading with choosing leverage of 1:500 or 0.2% of the contract value, and trading on the EUR/USD pair, where at XM broker for 0.01 lot on a micro account the value per pip is 0.01 x USD 0.1 = USD 0.001 or around Rp. 14,- (0.001 x Rp. 14000,-)
Explanation: for a standard account 1 lot = 100,000, the value per pip EUR/USD = USD 10,- and for 1 lot = 1000 (micro account) then the value per pip EUR/USD = (USD 10,- / 100) = USD 0.1.

By trading 0.01 lot in a micro account with 1:500 leverage and trading on EUR/USD, then if you buy or sell EUR/USD at a price (for example 1.0900) then your margin or collateral = 0.01 x 1,000 x 0.2% x 1.0900 = USD 0.0218. (explanation: 1,000 is the contract value).
Your durability = (USD 10 - USD 0.0218) / USD 0.001 = approximately 9978 pips.

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