Forex Daily Signals FAQ's

Question: What is a "pip"? What is a "lot"? How do I calculate how much to use for each trade if I want to use 5% of my account on each trade? How can I calculate how much I'm at risk for on each trade?

Answer: All of this seems much more complicated then it really is. A "pip" is simply a measurement used for a currency pair going up or down, they move in "pips", which are like pennies in the sense that there are 100 pennies in a dollar, just as there are 100 "pips" of movement in a dollar. So a "pip" is a measurement of each "tick" the price moves, each tick will be one "pip". A "lot" is simply a measurement of how much money is being put into the trade, like "shares" in a stock. Then there are different kinds of lots, there are "mini-lots", (fx solutions demo default) and there are "regular lots". Most people start off with "mini-lots", this basically means that one "lot" will be roughly equivalent to $100 to $200 of your own money, whereas a "regular lot" would be roughly equivalent to $1000 to $2000 of your own money, depending upon the currency pair. Using 5% of your account is a good general rule, but that can be confusing. So let me try to clear this up for you a little. The first thing you want to do is know how much 5% of your account is. So if you are starting with a $2,000 account, 5% for every trade is $100, so as a general rule you want to use $100 for every trade. But this really isn't how you should look at this. What you really want to know is for every "lot" you buy or short, you will be making or losing a set amount. For instance, if you buy the eur/usd with one "mini-lot" at 100:1 margin, (fx solutions demo default) at this current writing you would be using roughly $137.00 of your own money, whereas if you bought one "mini-lot" of the GBP/USD, that would cost you roughly $203.00. However, for each pip of movement these currencies move, you will be making or losing $1 per pip. It doesn't matter how much money you used for the trade, what matters is how much you are making or losing per pip. On the EUR/JPY and USD/CHF, you are making or losing .82 per pip, assuming you are using one "mini-lot" at 100:1 margin. So if you have a $2,000 account, and you want to use roughly 5% of your account to make each trade, you would use one mini-lot, which would be over your 5% quota, but here is why that's ok. Another way to look at this is not how much % of your account you use for each trade, but rather how much % you are at risk for on each trade, another words how much money you stand to lose on each trade. So if your account is $2000, as a general rule you don't want to lose anymore than 5%, that would be a $100 loss, leaving you with $1900 in the account. But in order to have that kind of loss following our signals (we use -50 pip stops) you would have to use 10% of your account. Let's say you start your account with $2,000, and you buy one "mini-lot" of the EUR/USD, if you lose on the trade thereby losing -50 pips, you will have lost $50 from your account, because you are making or losing $1 per pip, so when you lose -50 pips you lost $50, which would leave your account at $1,950. So in order to lose $100 from your account for each trade, you would have to buy two "mini-lots", then if you lose -50 pips on a trade you'll be making or losing $2 per pip, so losing -50 pips would be losing $100 from your account, leaving your account at $1,900. So instead of looking at this from the viewpoint of how much of your account to use for each trade, rather you can look at this from the viewpoint of how much you are at risk for on each trade. The bottom line however is that for the GBP/USD and EUR/USD each mini-lot with 100:1 margin you'll either be making or losing $1 per pip, with 5 mini-lots you'd be making or losing $5 per pip, etc. And for the USD/CHF and EUR/JPY you'll either be making or losing $.82 per pip, so -50 pips would be a $-41.00 loss. And remember this, as a general rule for each trade you'll either lose 50%, or you'll make from 1% to 500%, one "pip" would be 1%, and 500 "pips" would be 500%, so roughly speaking making 300 pips per month is like making 300% per month on your money. So if your account was $100,000, and you wanted to limit your risk on each trade to a 5% loss, ($5,000 loss) you would use 100 mini-lots for the trade, or 10 regular lots. Which means roughly speaking you would be using $10,000 of your own money for the trade, which is 10% of your account, and your risk is to lose $5000 (5% loss of your account and 50% loss from $10,000 used for the trade) and if you made +50 pips on the trade you'd make $5000, (50% profit) or if you made 100 pips on the trade you'd make $10,000 profit, (100% profit). So if you made +300 pips in a month with a $100,000 account using roughly 10% for every trade, risking a 5% loss for every trade, you'd make roughly $30,000 in profit for the month, or a 30% increase to your account in one month. So as you can see, trading the forex market is EXTREMELY profitable, but ONLY if you can do it successfully without too big of draw-downs (losing too many consecutive pips).

Question: There are so many signal providers on the Internet, all of them sound so convincing, why should I choose you over another provider?

Answer: That's an excellent question. The answer is a very very simple one, the reason why you should choose Forex Daily Signals over another signal provider is we're 100% honest, period. Our record is not a lie, its 100% real, and just as important, it's 100% attainable.

Question: Most all signal providers I've seen have a free trial period, it really bothers me you don't, I'd really like to try your signals before I pay for them, there are so many scams out there, I know you say you're not a scam, and I really want to believe you, but it's so hard to do because I've been burned before by smooth talkers, and I DON"T want to get burned again!

Answer: First of all let me say that I understand your situation, believe me I do. But let me share with you my side of this. If I allow people to come in for free, what will happen is that too many people will signup, and I'll have to spend so much time getting them setup, I'll have to set them up with a username and password, I'll have to set them up with emails and make sure they're working, I'll have to configure their emails in the system and go through the save process, and then I'll have to record them as "trial" members, and when they don't continue because they never had any intention of doing so in the first place, I'll have to go into the system and take out their username and password, and then go into the delivery system and take out their emails, and then go into the records and take them out as "trial members". When would I have time to trade? Please try to understand something, I'm a trader first, and a signal provider second, I enjoy sharing my trades (signals) with others, and I make them pay me for it, but let's get this straight here and now, I'm a trader first, then I'm a signal provider, I don't need members, they need me to help them make money at the forex market.

NOTE: If you have a question contact me and ask me, if its a good question I'll add it to this FAQ section and answer it.