In this article, we are going to go beyond Step index minimum lot size and look at other related queries concerning Synthetic and Forex trading as they share a fundamental principle when it comes to trading the financial market.
It is no doubt that step index is a unique stand-alone synthetic instrument that is offered by Deriv broker alone.
With these indices, there is an equal probability of up/down movement in a price series and it is traded by many Deriv synthetic traders.
For the record, to ensure a smooth trading experience, it is imperative to have a significant quantity of trading capital before trading step index or any other synthetic indices.
Without much ado, Let’s dive in!
STEP INDEX MINIMUM LOT SIZE CALCULATOR
Deriv broker has provided a reliable lot size calculator (https://deriv.com/trader-tools/pip-calculator/) that can be used for both synthetic and forex.
It assists you in estimating the pip value in your transactions so that you can manage your risk more effectively.
How to Determine Pip Value:
On Deriv MT5, the pip value for a contract is computed using the following formula:
Volume contract size Pip value equals point value
The pip value is determined in USD for synthetic accounts.
For financial accounts, the pip value for forex pairs is in the quote currency.
RELATED: MINIMUM LOT SIZE FOR VOLATILITY INDEX
STEP INDEX MINIMUM LOT SIZE
The minimum lot size for step index is 0.1 as there is an equal probability of up/down movement in a price series with a fixed step size of 0.1.
WHAT IS THE LOT SIZE FOR 100K ACCOUNT?
I guess the question is supposed to be “What is the minimum lot size for a 100k account?”
This is not an easy one to answer as there are many factors at play.
Above all one important factor to consider is what kind of trader are you.
- Scalper
- Day trader
- Swing trader
- Position trader
Your style of trading will determine your choice of lot size for a 100k account.
At the end of the day, whatever trading style you choose, you will still need to understand and apply the fundamental rules of trading if you want to see consistency.
To sum it all up as a day/swing trader, paying attention to the dominant trend and rally base rally /drop base drop and applying risk management, for a 100k account, I will comfortably use a lot size of 5-10.
HOW MUCH MONEY IS 0.01 LOT SIZE
Alright, imagine the forex market as a big shopping mall, and you, as a trader, want to buy or sell currencies. In this mall, a “lot” is like a shopping cart, and there are different sizes.
Now, a standard lot is like having a really big cart that can hold 100,000 items. But for beginners, we often use a smaller cart called a “micro-lot,” which can hold 1,000 items. That’s your 0.01 lot size!
Let’s say you’re shopping for euros (EUR) with U.S. dollars (USD), and the exchange rate is 1.1200 (meaning 1 EUR = 1.1200 USD).
If you put 0.01 micro lot in your cart and go to the checkout (make a trade), you’re essentially buying or selling 1,000 euros.
Now, to know how much money that is, you multiply the micro lot size (0.01) by the amount of currency (1,000 euros) and the exchange rate (1.1200). So, 0.01 * 1,000 * 1.1200 equals $11.20. That’s the value of your trade!
Understanding this helps you control how much you’re spending and risking in the Forex mall.
So, a 0.01 lot size is like using a smaller cart for your Forex shopping adventure – a great way for newbies to learn the ropes without taking on too much risk!
LIST OF COUNTRIES WHERE DERIV IS NOT AVAILABLE
It is no news that Deriv synthetic indices are not available to all countries because of regulatory laws surrounding financial trading.
Below are the lists of countries
Belarus (BY)
Canada (CA)
North Korea (KP)
Caribbean (BQ)
Cayman Islands (KY)
Guernsey (GG)
Guam (GU)
Hong Kong (HK)
Israel (IL)
Iran (IR)
Isle of Man (IOM)
Jersey (JE)
Jordan (JO)
Malaysia (MY)
U.S. Virgin Islands (VI)
Malta (MT)
Northern Mariana Islands (MP)
Paraguay (PY)
Puerto Rico (PR)
Rwanda (RW)
Sint Maarten (SX)
Singapore (SG)
Vanuatu (VU)
South Sudan (SS)
United Arab Emirates (UAE)
United States Minor Outlying Islands (UM)
U.S. Outlying Islands
United States (US)
