How to change the password in MT4

Do you want to change the password on your MetaTrader account but you don’t know how to do it?The change password button it’s not in an obvious position!
To change the password, go to Tools=>Option (or press CTRL+O) and then press the Change button.
You have to insert your present master password and then choose if you want to change the master or investor (read-only) password.

Pip vs pip

I closed the previous post saying that a signal provider, to conceal the fact that he was losing a lot in short time, was trading on gold. Why? If you go to see on the 20 pips winers profile, we see that in a few weeks he made over ten thousand pips. WHOA!! A genius?
No, it’s simply a long standing bug in the ZuluTrade interface: pips are not weighted the same.
Let’s clarify:
If I buy 1 lot of EUR/USD, 1 pip is worth $10
If I buy 1 lot of gold, 1 pip is worth $0.10
He made over 10000 pips in a few weeks? I’m happy for him, but it’s worth as 100 pips of EUR/USD…
On the Italian edition of this diary, a “reader” commented with:

I tried in demo boreFXcorporation and it made 3000 pips in those days

Well, If someone like me, is accustomed to think to a small account where and trade microlots, 3000 pips is $300 – not bad, he could think.

The graph is sexy, you see comments on the official forum as “boreFXcorporation has earn 5700 pips in the last 7 days” , you have no experience on gold trading and you don’t know that 5700 gold pips “equates” to 57 pips = big loss!

On the bright side: on forums I told them this problem (in Italian), and they created a new gold-less signal: Tualatin. Right now it’s too early to say if it can work, in september I will evaluate it.

Risk and leverage

On some forums I read that using a financial leverage over 100:1 is crazy, it’s better having lower values, 50:1 or less.

I am not an expert, I write some thoughts on those thoughts.
A standard lot, usually, is 100k dollars. (On cent brokers is 1k dollars)
A minilot is 0.1 lot (10k dollars) and microlot is 0.01 lot (1000 dollars)

Let’s do some examples with numbers.
In our example the dollar goes from 1.4021 a 1.3273 and we have a 1000 dollars account.

Without leverage, I buy a microlot of EUR/USD at $1000 and I use the entire capital.
If I buy $1000 at 1.4021 (€713.22) and sell at 1.3273 (€ 753.41 euro), I make €40.19 euro. (or I could have lost them)

With a 2:1 leverage I could buy the same microlot with $500, and get the same €40.19 gain, not the double.
With a 50:1 leverage, I could buy it with $20, getting the same result.
With a 100:1, I could get it with $10, still getting the same result.
And with a 500:1 I could get it with $2, getting, guess what? The same €40.19 gain.

With all the conditions being equal, the leverage does not change at all the final result.

What’s the problem? It’s that, usually, a such big change of the EUR/USD exchange rate it’s something that happens in a long time, and it’s difficult to predict. It’s favorable getting smaller profits for each trade, for example selling the same trade at 1,3970 and be pleased with a €2.60 gain, maybe buying 1 minilot and making 26 euro. Or you could buy 1 lot (that with a 500:1 leverage is $200), making €260 in a single trade. It’s all about greediness.

I do a borderline case:
With a $105 account and leverage 100:1 I open a minilot trade ($10k of EUR for $100). Boom! Immediate margin call! The broker spread made the trade lose more than it could and it closed the trade.
With the same $105 account but with a 200:1 leverage, opening the same trade makes the €26 profit.
In this borderline case, the 200:1 leverage was safer, because the trade required less capital, and the remain covered the margin.

The conclusion is: with all conditions being equal, an higher leverage is saver than a lower one.