CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Excess volatility increases risk further. Be cautious. Past performance is not an indication of future results.
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Arithmetic, done in advance

Four numbers, written down before any order window opens (Nigeria)

Risk sounds like a temperament and behaves like arithmetic. Four numbers decide almost everything about how a beginner's first months go, all four are settled away from the platform, and none of them requires an opinion about where a price is heading. Work them out on paper once and the ticket becomes a typing exercise; skip them and every trade turns into a fresh argument with yourself at the worst possible moment.

In order: how much money is in this at all, how much of it one single trade is allowed to reach, how far away the exit sits, and what size makes those last two agree. The first is a household decision and has nothing to do with markets. The second is a share you choose once and stop renegotiating. The third comes from the chart. Only the fourth is calculated, and it is one line of multiplication. Everything that follows on this page is those four numbers in more words.

The first: the amount that is in this at all

Not a target and not a limit — a fixed sum, decided at the kitchen table rather than in front of a chart, and separated from everything else you own before a platform is ever opened. The test is one sentence long: if it went to zero tomorrow, your life would not change. Rent fails that test. Bills fail it. Savings a family is counting on fail it. Borrowed money fails it twice, because a loss then arrives with a repayment attached to it.

What makes this number the important one is that it is the only cap that cannot be argued away later. Every other decision on this page is made while the screen is on, and screens are persuasive. This one is made in a quiet room, in advance, by a version of you who is not currently losing.

The second: the share a single trade may reach

About 1% of that amount is the beginner's setting — on $100, about $1. Written down, it looks far too small to be worth the effort, and that reaction is the exact reason it works.

Run a streak through it and the point appears. At about 1% each, ten losing trades in a row cost roughly a tenth of the account and leave nine tenths intact, which is a bad fortnight rather than an ending. At ten times that share, the same ten trades take most of it, and there is no longer enough left for a recovery to be arithmetically possible. Nobody plans a streak of ten; streaks are what the share is chosen for.

The third and fourth: distance, then size

The exit distance comes from the chart, not from the wallet: it belongs where the reading you made stops being true. The size is then whatever makes the distance cost no more than the share.

One worked line. Buy EUR/USD at 1.1000 at 0.01 lots. A pip is the step from 1.1000 to 1.1001, worth about 10 cents at that size. An exit 20 pips below stands in front of 20 × $0.10 — about $2. Against a $1 allowance that is twice too much, and there are two ways to fix it, only one of which is honest. Moving the exit nearer makes the sum come out and hands the trade to ordinary movement while the idea behind it is still fine. Moving the size down keeps the reading intact. Where 0.01 lots is already the floor, the unit itself moves instead: a Standard Cent account counts in units about a hundred times smaller, which puts the same trade near two cents (how the types differ). The calculator does this line for you, and it only changes an outcome while the ticket is still closed.

The setting that was chosen weeks earlier

Leverage sits behind all four numbers and is picked once, with the account. It does not change what a loss costs — that is still distance times size — and it decides which sizes a small balance is even allowed to open, including sizes far above the share written down above. It enlarges a result in either direction by the same factor, which is how an account that took months to fund can empty in an afternoon. Nothing on an order ticket restates it, so it is worth reading in the account settings on a day when nothing is open.

What the four numbers do not do

  • They do not predict anything. Sizing decides how long an account survives while you find out whether your reading was any good. It has no opinion about the reading itself.
  • An account cannot fall below zero. Negative Balance Protection limits losses to the money deposited. Everything deposited can still go, and the floor is zero rather than a number anybody would be pleased with.
  • The dangerous minutes come after a loss. The screen is ready to start again immediately, and something bigger opened to win it back turns one loss into three. End the session, not just the trade. More of that family.
  • Many people lose money when they start, often after rushing, skipping practice, or risking too much too early. Four numbers on paper are the one defence that costs nothing to put in place.
  • Practice results do not carry over. The screens are identical and the emotions are not, so a plan that fails on virtual money will not start working on real money.

This site is an independent guide and not a broker: it holds no money, places no trades and gives no personal recommendations. CFDs are complex instruments and trading may not be suitable for everyone.

Questions about the four numbers

How much should one trade be allowed to cost?

About 1% of the trading amount — roughly $1 on $100. Small enough that ten in a row leaves nine tenths of the account.

What counts as the trading amount in the first place?

A separate, fixed sum whose loss would change nothing about your month. Never rent, bills, savings or borrowed money.

The sum comes out too large. Do I move the exit or the size?

The size. Pulling the exit closer overrules a reading you already made and hands the trade to ordinary movement.

0.01 lots is already the floor and it is still too much. Now what?

The unit moves instead: a Standard Cent account counts in units about a hundred times smaller.

Does leverage change what a loss costs?

No. It changes which sizes are available, and it enlarges a result in either direction by the same factor.

Ten losses in a row — is the account finished?

At about 1% each, roughly a tenth is gone. At ten times that share, most of it is.

Should the share change after a good week?

Renegotiating it while the screen is on is the habit the number exists to prevent. It is a decision for a quiet room, not for a streak.

Where can all four be tested without spending anything?

On a practice account: virtual money, live prices, no time limit, and the same arithmetic.

Where the four numbers are used

Practice calculator

From a share to a size, before anything opens.

Run it first

Words by duration

Which figure is parked, which is settled, which is gone.

Read the list

Your first trade

The same four numbers, typed for nothing.

Walk through it

Type the four numbers somewhere they cost nothing.

A demo gives virtual money and live prices, free and with no time limit — the only place a size can be got wrong for free. The button opens the exness.com sign-up through a partner link.

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