Academy · to print

Six cheat sheets.

One page each. Print them, or choose “Save as PDF” in the print dialogue. The first and the fifth are arithmetic worked out on this page; the other four are method.

GIO4X Academy · cheat sheet 1 of 6

What a pip is worth

The value of one pip is the size of the position multiplied by the pip, in the pair’s quote currency. Convert to your account’s currency at the going rate.

Pairs quoted in USD, e.g. EUR/USD

Lot	Units	1 pip	10 pips	25 pips	50 pips	100 pips
Micro 0.01	1,000	0.10 USD	1.00	2.50	5.00	10.00
Mini 0.10	10,000	1.00 USD	10.00	25.00	50.00	100
Standard 1.00	100,000	10.00 USD	100	250	500	1,000

Pairs quoted in JPY, e.g. USD/JPY

Lot	Units	1 pip	10 pips	25 pips	50 pips	100 pips
Micro 0.01	1,000	10.00 JPY	100	250	500	1,000
Mini 0.10	10,000	100 JPY	1,000	2,500	5,000	10,000
Standard 1.00	100,000	1,000 JPY	10,000	25,000	50,000	100,000

The size from the stop: lots = amount you will risk ÷ (stop in pips × value of one pip per lot).

Arithmetic. Not the conditions of any account, and not advice.

GIO4X Academy · cheat sheet 2 of 6

Before any trade

Nine questions, in order. If any has no answer, the order is not finished.

1The reasonCan I say in one sentence why I am taking this trade?
2The stopWhere is this idea wrong? Is the stop there, and on the right side?
3The roomIs the stop further away than this pair moves in ordinary noise?
4The sizeDoes the size make the stop cost the share of the account I chose, and no more?
5The targetIs what I aim for larger than what I risk?
6The costWhat do the spread, commission and any swap come to, against that target?
7The calendarIs a major release due while this trade is open?
8The totalWith my other open trades, how much is at risk altogether? Are any of them the same trade twice?
9The stateAm I calm, or am I trying to win something back?

A method for checking an order. It removes avoidable mistakes; it does not make a trade win.

GIO4X Academy · cheat sheet 3 of 6

Reading a candle

The body: From the open to the close. A long body: price travelled and stayed. A short one: it ended near where it began.
The upper wick: From the body up to the high. Price went there and came back.
The lower wick: From the body down to the low. Price went there and came back.
The colour: One colour if it closed above its open, another if below. Check which is which on your own chart.
Its neighbours: A candle twice the size of those before it is a different event from one the same size.
What it cannot say: A candle is a record of one period. It does not tell you the next.

Drawn as a candle that closed above its open. General reading, not a signal.

GIO4X Academy · cheat sheet 4 of 6

Order types at a glance

An order is an instruction with a condition. A limit controls the price and gives up the certainty of a fill; a stop gives up the price to be filled.

Order	What it instructs	When it fills
Market	Buy or sell now, at the best price available.	At once, at whatever price is there. In a fast market that can differ from the price you saw: slippage.
Limit	Buy at this price or lower; sell at this price or higher.	Only if the market reaches your price, and then at that price or better. It may never fill.
Stop	When the price reaches this level, send a market order.	After the trigger, at the next price available: at the level in a quiet market, beyond it across a gap.
Stop-limit	When the price reaches the stop level, place a limit order at the limit price.	After the trigger, only at the limit price or better. If the market goes straight past, it stays unfilled.
Trailing stop	A stop that follows the price at a set distance while the price moves in the position’s favour, and stays where it is when the price turns back.	As a stop does: once the price has come back by the set distance, at the next price available.

Where a pending order rests

Buy limit: below the market
Sell limit: above the market
Buy stop: above the market
Sell stop: below the market

On an open position: a stop loss is a stop order and a take profit is a limit order. A stop loss limits a loss in ordinary conditions; across a gap it is filled on the far side of the gap.

What each order instructs, in general. Which types a platform offers, and how it handles each, is in that platform’s own documentation. Not advice.

GIO4X Academy · cheat sheet 5 of 6

Margin and leverage arithmetic

An example with invented figures: a balance of 5,000, a position of 0.5 lots with 100,000 units to the lot at a price of 1.2000, leverage of 1:100, and a floating loss of 200. The price is quoted in the account’s currency, so nothing is converted.

Figure	Formula	The example, worked
Notional value	lots × contract size × price	0.5 × 100,000 × 1.2000 = 60,000
Margin (used)	notional value ÷ leverage	60,000 ÷ 100 = 600
Equity	balance + floating profit or loss	5,000 + (−200) = 4,800
Free margin	equity − used margin	4,800 − 600 = 4,200
Margin level	equity ÷ used margin × 100	4,800 ÷ 600 × 100 = 800%
Effective leverage	notional value ÷ equity	60,000 ÷ 4,800 = 12.5 times

The same example position at three leverages

Leverage	Margin for 60,000	A 1% move against it
1:30	2,000	−600
1:100	600	−600
1:500	120	−600

What the table shows: leverage changes the deposit a position needs, not what a move does to it. Profit and loss are worked on the notional value. Margin is set aside, not spent, and it is not the most that can be lost.

Arithmetic on invented example figures. The margin levels at which a broker warns or closes positions are that broker’s own, and are not shown here. Not advice.

GIO4X Academy · cheat sheet 6 of 6

Sizing a trade: a risk checklist

Ten steps, in order, from the loss you chose in advance to the size. The size comes last: it is whatever makes the earlier answers true together.

1The accountWhat balance is the risk measured on?
2The shareWhat share of it may this one trade lose? Chosen beforehand, not at the screen.
3The amountShare × balance: what is that in money?
4The stopWhere is the idea wrong? How many pips from the entry is that?
5The pipWhat is one pip worth on one lot of this instrument, in the account’s currency?
6The sizeAmount ÷ (stop in pips × pip value per lot). Rounded down: rounding up risks more than the amount chosen.
7The marginDoes that size fit inside the free margin, with room left for the trade to move?
8The costsAre spread, commission and any swap counted inside the amount?
9The gapIf the stop is filled beyond its level, what is the loss then?
10The totalWith the trades already open, what is at risk altogether? Do several lean on the same currency?

An example with invented figures: 10,000 × 1% = 100 at risk; a stop of 25 pips; one pip worth 10 per lot. 100 ÷ (25 × 10) = 0.40 lots.

A method for working out a size from a loss chosen in advance. It sets a planned loss, which a gap can exceed; it does not make a trade win. Not advice.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

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