Visual explainers

Part of what the Academy lessons are trying to say is understood not in a sentence but in a shape: a formula, a proportion, where an order sits relative to price. All of them are here, on one page.

Visual explainer

How position size is worked out

Lot is not a number to decide on, it is the result of three inputs: how much you are risking, how many pips away your stop is, and what one pip is worth on that instrument.

Visual explainer

Risk/reward ratio and the break-even win rate

A ratio is neither good nor bad on its own. The only thing it says is how many trades have to win for you to break even at that ratio — if your win rate is below that threshold, the ratio will not save you.

Visual explainer

Why recovering a drawdown is not proportional

The loss percentage is taken off the balance you had; the recovery percentage is earned on the balance that is left. They are not the same number, and the gap widens as the drawdown deepens.

Visual explainer

Where pending orders are placed relative to price

All four order types are defined relative to the current price. Mixing up which goes where leaves the order waiting on exactly the opposite side from the one you wanted.

Visual explainer

Sessions and the hours they overlap

The three sessions cover different hours of the day, and the range where two of them overlap is the most liquid part of it. Liquidity means trading conditions, not direction.

Visual explainer

What leverage changes, and what it does not

LeverageMargin locked up

1 : 303.333

1 : 1001.000

1 : 500200

What does not change on any row

The position is the same size, so a 20-pip move is worth the same amount on all three rows. Leverage does not change that amount — it changes the margin the position locks up.

Based on a 100,000-unit position, in the account currency. Freed-up margin allows more positions to be opened; what increases risk is not leverage itself but the use of that room.

Leverage changes the margin a position locks up. It does not change what that same position gains or loses from a one-pip move.

The figures here explain mechanics: how a calculation is made, where an order is placed, what a period covers. None of them is a direction, level or timing recommendation, and none is investment advice.

The figures also appear inside the lessons

Each one turns up again at the start of the lesson it belongs to. To read them in order, start with lesson 1.

See the lessons Open the position calculator

How position size is worked out

Lot is not a number to decide on, it is the result of three inputs: how much you are risking, how many pips away your stop is, and what one pip is worth on that instrument.

Risk/reward ratio and the break-even win rate

Where pending orders are placed relative to price

All four order types are defined relative to the current price. Mixing up which goes where leaves the order waiting on exactly the opposite side from the one you wanted.

Sessions and the hours they overlap

The three sessions cover different hours of the day, and the range where two of them overlap is the most liquid part of it. Liquidity means trading conditions, not direction.

What leverage changes, and what it does not

LeverageMargin locked up

1 : 303.333

1 : 1001.000

1 : 500200

What does not change on any row

The position is the same size, so a 20-pip move is worth the same amount on all three rows. Leverage does not change that amount — it changes the margin the position locks up.

Based on a 100,000-unit position, in the account currency. Freed-up margin allows more positions to be opened; what increases risk is not leverage itself but the use of that room.

Leverage changes the margin a position locks up. It does not change what that same position gains or loses from a one-pip move.