When opening ticket, the Buy/Bid and Sell/Ask are the current exchange rate while the Margin is calculated from XTB’s exchange rate at an unknown point of time.

Major: Most frequently traded

Minor: Pair w/o US$

Exotic: Pair with emerging economy

Stop Loss helps to manage your risk and keep your losses to an acceptable and controlled minimum amount.

Take Profit order is an order that closes your trade once it reaches a certain level of profit.

Ref. https://www.xtb.com/en/trading-services/account-information/market-specification

Let’s say your initial capital is £5,000 and you’d like to open a 1 lot transaction on GBP/USD

On the GBP/USD, the nominal value per lot is £100,000. 

The leverage is 30:1, you only need 3.33% for the margin of this trade.

Therefore, you need £3,333.33 for the margin of a 1 lot transaction, 66.67% of your total capital.

A pip stands for ‘percentage in points’.

A pip is the smallest price change that a market can make. 

GBPUSD moving from 1.2545 to 1.2546 is a movement of one pip.

(for 1.2545: [1.25][45] 1,2,5 are big figures; 4,5 are pips)

To calculate the pip value per 1 lot, multiply the ‘Nominal Value of one lot’ with the ‘Size of one PIP’ and the value will be in the quoted currency: US$100000 x 0.0001 = US$10

For example, a 1 lot transaction on the EURUSD gives a pip value of £7.62 (£76200 x 0.0001)

If the market moves in your favour by 10 pips, you would generate a profit of £76.20 (7.62 x 10). 

If the market moves against you by 10 pips, you would generate a loss of £76.20 (7.62 x 10). 

The general idea is that you should not risk more than 5% of your total capital in a position. The reason for this is that trading is based on probability and you should give your strategy a chance of assessment, to identify whether you have a bigger probability of achieving success rather than defeat.

You open a 1 lot transaction on GBP/USD with a pip value of £10. 

You will also follow the rule of not accepting a loss higher than 5% of your total capital. Therefore, your total capital is £5,000, so your maximum accepted loss is £250, which is approximately $380.

If you know that 1 pip is worth $10 and your maximum accepted loss adds up to $380, then by dividing $380 by 10, your maximum Stop Loss level is 38 pips.

Balance = Equity – live P/L – Swap

Equity = Balance + live P/L + Swap

If no live P/L & Swap, Balance = Equity

Balance = Margin + Free Margin

Equity = Margin + live P/L + Swap + Free Margin

Margin = Balance – Free Margin

Margin = Equity – live P/L – Swap – Free Margin

Margin Level = Equity/Margin * 100%

Margin is an amount of money that is frozen when you open a position and returned to you once the transaction has been closed. 

Free Margin is the money in a trading account that is available for trading.

Margin close when Margin Level @ 50%

Margin close is when XTB notifies you that you’re at 50% Margin Level

Stop out happens at 30%

  • Sell when above benchmark, Buy when below
  • Do not Sell/Buy when too close to S/R (judge by pips amount)