What is Currency Exchange?

A currency exchange is when you convert a currency to another. Usually each country has its own currency and if for example you鈥檙e buying an item with a different currency or traveling to a country with a different currency than you, this would require an exchange of currencies where you sell your currency and buy another (this would usually require a conversion fee) through a financial institution.

What is the purpose of a currency converter?

A currency converter is a useful tool to quickly convert between different foreign currencies, for example Euros to US Dollars. Using our calculator will do a live currency conversion with the current exchange rates.

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How to Use the Position Size and Risk Calculator

Currency pair:聽Traders can select from Major Forex crosses, Minor pairs and also the most popular cryptocurrencies versus the USD (BTC/USD, ETH/USD, LTCUSD, XLM/USD and XRP/USD) or Gold/Silver versus the USD. Let’s choose, for example, the USD/CAD.

Deposit currency:聽The account base currency is important to assess the ideal lot size, as it takes into consideration the pip value and the market rate of the selected cross. We choose USD as our deposit currency, for this example.

Stop loss (pips):聽Traders should input the maximum number of pips they are willing to risk, or lose, in a trade, to protect the account equity in case the market goes against their position. For this example we will use 100 pips as our stop loss.

Account balance:聽Pretty straight forward, traders just need to input their account equity. On our example we will type 2000.

Risk:聽The crucial field of this Position Size and Risk Calculator! In this field traders can select from a risk percentage or any amount of their account base currency ($2, $20, $40, etc). As a guideline,聽professional traders do not risk more than 2% of their account equity per trade. This technique will allow for traders to last longer with their trading careers, and eventually, also to recoup from previously losing trades. For our example we will select 2% risk.

Now, we hit the “Calculate” button.


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