On the Oanda App, you get a screen something like this. This screen shot is taken from my desktop version, but the mobile screen is basically identical. In the rush of trying to put in my position around 1700 today, I settled on 200 units. What are units? Here's the formula, but the caveat is that I don't think it's necessary to understand it when setting up your position size.
Units = (Margin available * Margin Ratio)/ (Base/Home Exchange Rate) = (1000*50)/(.6921) = 80,000 units. Now, that's with a leverage of 50:1. Interestingly, I see around 48,000 available units, but this was the formula I found online.
To set up my position going forward, here's how it's done: 1st, I set up my risk, 4% of my balance, $40. From here, I put it in the Stop Loss pips (and Take Profit afterwards). For instance, today I would have put 15 pips for the SL, 30 for the TP (and it would have worked!). Then, I would basically play around with Units until the SL at the bottom of the window matches my risk. In this case, it was around 25,000 units to get to -$37.50. I would play around it get exactly -$40 for the heck of it.
AUD's GDP growth rate was -.3%. Because it was down, with no other big US fundamental news coming out today, I expected the USD to be stronger compared to the kiwi immediately following the news. Actually, AUDUSD was bullish before the news even dropped (about 2 hours earlier). Another note, Pacific Standard Time (PST) is 17 hours behind East Australia. So I wanted to enter around 1600. 1600 + 17 hrs = 0900.
Finally, US GDP growth rate is determined from 4 main components according to thebalance.com :
- Personal Consumption including retail sales
- Business Investment including construction and inventory levels
- Government Spending, largest categories being Social Security benefits, defense spending, and Medicare benefits.
- Net Trade
My next trades will be on the USD and the JPY later this week. Stay tuned.
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