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Lesson 8: What is the best trade size in forex trading? - YouTube
Channel: Financial Wars
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- hey everybody welcome back these are
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your FX trading 101 lessons sponsored by
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Forest Park FX I'm Rob Booker welcome
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nice to see you here we're back again we
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took a short break that you didn't see
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in between the last video and this one
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in the last video we talked about trade
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sizes and we talked about the pip value
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for each trade size micro mini and
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standard trade sizes in this video I
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wanted to talk about what the best trade
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size is that's a I get this question all
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the time now if you're a beginner and
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you're trading this is a really
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important question and I'm gonna answer
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it specifically because you don't get
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enough specific answers in the world of
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trading if your first trading account is
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less than or equal to one thousand
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dollars then the very best trade size
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that you can use to start with is 0.01
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or a micro lot in fact your Forex dealer
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may open an account for you called a
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micro account where a micro trade size
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is the starter trade size if your
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account is between 5,000 and 10,000 and
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you know that's a range I know there's
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numbers missing in between here your
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best trade size is probably 0.1 or a
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mini lot to start with as a
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discretionary trader buying and selling
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pushing buttons and whatnot
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if your account is really over 20,000
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then you could maybe trade five mini
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Lots maybe one standard lot maybe for
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$10 a pip if you're feeling really
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confident and you're feeling really good
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in other words the very best trade size
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is small especially to start with now it
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doesn't mean it's small forever when I
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first started trading the smallest trade
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size you could trade was a standard lot
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so I was training for $10 a pip on my
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first $1,000 account and I promptly blew
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up my first trading account because my
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trade size was so big why do I say that
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your trade size should remain small at
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least and specifically at the beginning
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well let's take for example I don't know
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if this is up but yeah this is up so
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let's take for example a one lot trade
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size on the US dollar Japanese yen and
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so we just bought a one lot trade size
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on the US dollar Japanese yen and let's
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say we have a thousand dollar trading
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account so if we have a thousand dollars
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in our trading account and the US dollar
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Japanese yen moves as it does 100 pips
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in one day and let's say that those 100
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pips move against us that's not a trade
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in our favor if you multiply that times
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$10 a pip for a standard lot you've just
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blown up your trading account your
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thousand dollars is gone in fact your
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broker will close your trading account
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down even before that number is reached
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and you might say well oh I'm not gonna
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let it go a hundred pips against me and
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whatnot no you probably won't most of
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the time but all it takes is a one
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second move right after an economic news
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report and suddenly your account is gone
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maybe you have a two thousand dollar
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account and all of a sudden you're down
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a thousand dollars and you've lost 50
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percent I know you can I know you
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believe me when I say this is what
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happens all the time to almost every new
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trader that starts new traders aren't
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bad traders actually in fact most new
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traders have a little bit of beginner's
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luck which is fantastic but also most
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new traders have some kind of damaging
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first experience and because most new
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traders don't keep their trade size
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small most new traders blow up their
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trading account so going back to the
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previous slide I think the best trade
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size for everyone no matter what your
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account size is
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is a micro lot even if you have millions
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of dollars in your personal bank
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accounts I think it's best to start
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trading with a really really small trade
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size that way you can last through
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anything that happens you can learn over
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your first 30 days of trading you can
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learn a simple system that I teach you
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here in these lessons with no stress
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whatsoever
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now there's another final answer to this
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question and it concerns demonstration
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trading accounts I'm going to get into
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that subject in the very next lesson but
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before we leave you off here I want to
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thank our sponsor Forest Park FX if
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you're interested in FX trading contact
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forest park FX to open up a trading
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account and get cashback rebates on
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every trade you place go to Forest Park
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FX calm remember forex trading carries
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significant risk of loss
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terms and conditions will apply I'm Rob
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Booker I'll see you in the next lesson
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