GIO4X Labs · Experiment

The Engine Room

Six machines about what happens to a trade once it is on. Each shows one mechanism, with figures that are arithmetic or plain examples and say which.

The margin-call countdown

Watch the cushion go.

An example account as the price moves against it: warning, margin call, stop-out.

Margin calculator

Price moves against the position: 20 pips

Equity 1,800, margin level 180%. Comfortable: the equity is well above the margin in use.

An example account: 2,000 in it, one standard lot at 1:100 (1,000 of margin), 10 per pip. The three levels are examples; each account’s own are set by its conditions.

The swap clock

Five rollovers, seven nights.

Hold a position through the week and see when each night is settled, and which day settles three.

Swap, defined

One position, held from Monday. Each day’s rollover settles the swap for the night.

The triple rollover is commonly on Wednesday for currency pairs; the day, and whether swap is charged or credited, depend on the instrument and the account.

Slippage in slow motion

The stop was there. The price was not.

A release, a gap and a fill, one frame at a time.

Slippage, defined

Frame: 19 of 38

A quiet price, with a stop waiting below it.

An invented price. A stop limits a loss in ordinary conditions; it does not guarantee the level.

The compounding staircase

The climb back is taller than the fall.

Set a loss and see the gain it takes to stand where you began.

Drawdown calculator

The loss: 50%

Lose 50% and it takes a gain of 100% to stand where you began, because the gain is earned on what is left. Past a half, the way back is longer than the way down was.

Arithmetic: loss ÷ (100 − loss). It is why a loss kept small is worth more than a gain made large.

The correlation dance

Two positions, or one in disguise?

Tie two series together, loosely or tightly, and watch them move.

Correlation, defined

How closely the two are tied: +0.8

Nearly in step. A position in each is close to one position twice the size.

Two invented series. A correlation is measured over a past period and can change; it is not a rule.

The marbles

Same coin. Different share risked.

A hundred accounts, fifty coin flips each. Change only how much each trade risks.

Position size calculator

Risk per trade

Risking 2% a trade, 0 of 100 accounts fell below half of where they began at some point in fifty trades. The coin never changed: only the share risked.

A model: fifty fair coin flips, the same sequence for every setting. It shows how the share risked changes the range of outcomes, not what any strategy will do.

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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