– hey everybody welcome back these are your FX trading 101 lessons sponsored by Forest Park FX I'm Rob Booker welcome nice to see you here we're back again we took a short break that you didn't see in between the last video and this one in the last video we talked about trade sizes and we talked about the pip value for each trade size micro mini and standard trade sizes in this video I wanted to talk about what the best trade size is that's a I get this question all the time now if you're a beginner and you're trading this is a really important question and I'm gonna answer it specifically because you don't get enough specific answers in the world of trading if your first trading account is less than or equal to one thousand dollars then the very best trade size that you can use to start with is 0.
01 or a micro lot in fact your Forex dealer may open an account for you called a micro account where a micro trade size is the starter trade size if your account is between 5, 000 and 10, 000 and you know that's a range I know there's numbers missing in between here your best trade size is probably 0.
1 or a mini lot to start with as a discretionary trader buying and selling pushing buttons and whatnot if your account is really over 20, 000 then you could maybe trade five mini Lots maybe one standard lot maybe for $10 a pip if you're feeling really confident and you're feeling really good in other words the very best trade size is small especially to start with now it doesn't mean it's small forever when I first started trading the smallest trade size you could trade was a standard lot so I was training for $10 a pip on my first $1, 000 account and I promptly blew up my first trading account because my trade size was so big why do I say that your trade size should remain small at least and specifically at the beginning well let's take for example I don't know if this is up but yeah this is up so let's take for example a one lot trade size on the US dollar Japanese yen and so we just bought a one lot trade size on the US dollar Japanese yen and let's say we have a thousand dollar trading account so if we have a thousand dollars in our trading account and the US dollar Japanese yen moves as it does 100 pips in one day and let's say that those 100 pips move against us that's not a trade in our favor if you multiply that times $10 a pip for a standard lot you've just blown up your trading account your thousand dollars is gone in fact your broker will close your trading account down even before that number is reached and you might say well oh I'm not gonna let it go a hundred pips against me and whatnot no you probably won't most of the time but all it takes is a one second move right after an economic news report and suddenly your account is gone maybe you have a two thousand dollar account and all of a sudden you're down a thousand dollars and you've lost 50 percent I know you can I know you believe me when I say this is what happens all the time to almost every new trader that starts new traders aren't bad traders actually in fact most new traders have a little bit of beginner's luck which is fantastic but also most new traders have some kind of damaging first experience and because most new traders don't keep their trade size small most new traders blow up their trading account so going back to the previous slide I think the best trade size for everyone no matter what your account size is is a micro lot even if you have millions of dollars in your personal bank accounts I think it's best to start trading with a really really small trade size that way you can last through anything that happens you can learn over your first 30 days of trading you can learn a simple system that I teach you here in these lessons with no stress whatsoever now there's another final answer to this question and it concerns demonstration trading accounts I'm going to get into that subject in the very next lesson but before we leave you off here I want to thank our sponsor Forest Park FX if you're interested in FX trading contact forest park FX to open up a trading account and get cashback rebates on every trade you place go to Forest Park FX calm remember forex trading carries significant risk of loss terms and conditions will apply I'm Rob Booker I'll see you in the next lesson.
