When in the strategy tester I change the levrerage to 1:500 and 1:100 or any option in the drop down and it has no effect on my profits, why??
MQL Support told me it is because I dont use the levrerage value in my lot calculation but when searching for "levrerage value" I get no help on this.
Surely by changing the leaverage would effect the value of 0.01 lot? what I'm trying to say it if I'm on 0.01 lot and on 1:100 levrerage one pip would be for examples sake $10 but when you on 1:500 leaverage and trading with the same, 0.01 lot, the value should not be the same per dollar??
It is not true. See the article Forex Trading ABC. Leverage value affects on margin not on pips value.
Trading on financial markets is attractive for it allows traders to profit from
leverage. In our example with buying one lot of EURUSD, we would have to have over
100 000 US dollars (125 000 at the rate of 1.25). Most brokers allow traders to
use so-called 'leverage'. The value of leverage shows how many times less capital
should be available to open a position. The amount of money necessary to open a
position is named margin. Without leverage, one lot of EURUSD costs 100 000 euros,
or 125 000 US dollars at the rate of 1.2500. If your broker provides you with the
leverage of 100, the amount of money necessary to open a position will be decreased
100 times and make 1250 US dollars. The profit we have already calculated remains
the same. You can see the leverage value on a given trade account using function
AccountLeverage(). Thus, the margin for opening one lot is defined as:
Price of the symbol base currency in terms of the deposit currency is the ratio
between the symbol base currency and the deposit currency.
Thanks Rosh this helped expain allot thanks.
So, just to make sure I get this and the purpose is of the leverage drop down in the Strategy tester. By changing the leverage lower it requirems me to have a bigger startup capital and aalso effect my max lot size? By making the leverage smaller I get to startup with a smaller capital but my max lot size would be considerably smaller?
...and as you article explains it doesn't effect the profits.
Hope I summed it up?
thanks for taking the time to respond.