Rakota TraderUnderstanding these key terms and principles will help you trade smarter, manage risk, and make the most of your Rakota Trader signals.
Margin is the amount of money required in your trading account to open and maintain a trade. It acts as a 'good faith deposit' to ensure you can cover potential losses.
If you want to trade 0.10 lot of EURUSD (worth $10,000) with a 1:100 leverage, you need $100 margin (10,000 ÷ 100).
Leverage allows you to control larger trade sizes with a smaller amount of capital. It is expressed as a ratio (like 1:100 or 1:500). Higher leverage increases both potential profits and losses.
With 1:100 leverage, $100 in your account can control a $10,000 trade size.
A lot is the standard unit size of a trade. It determines how much each pip movement is worth in your account. Brokers usually allow standard, mini, and micro lot sizes.
1 standard lot = 100,000 units of currency (1 pip ≈ $10). 0.10 lot = 10,000 units (1 pip ≈ $1). 0.01 lot = 1,000 units (1 pip ≈ $0.10).
A Stop Loss is an order to automatically close a trade when the market reaches a specific unfavorable price. It limits potential loss on a trade.
If you BUY EURUSD at 1.1000 and set SL at 1.0980, the trade closes if the price drops to 1.0980, limiting loss to 20 pips.
A Take Profit order automatically closes your trade when the price reaches a set target in your favor. It locks in your profits.
If you BUY EURUSD at 1.1000 with TP at 1.1030, your trade will close automatically once the price hits 1.1030, capturing 30 pips profit.
This ratio compares the potential profit of a trade to its potential loss. A good R:R helps ensure long-term profitability even with some losing trades.
If you risk 20 pips to make 60 pips, your risk-to-reward ratio is 1:3. This means for every $1 risked, you could make $3.
Equity represents your account balance plus or minus any open trade profits or losses. It constantly changes as market prices move.
If your account balance is $500 and you have an open trade showing +$50 profit, your equity is $550.
Free Margin is the money available in your account to open new trades. It’s the difference between your equity and used margin.
If your equity is $1,000 and your used margin is $200, your free margin is $800.
Margin Level shows the health of your account. It’s calculated as (Equity / Used Margin) × 100. Brokers may close your trades if it drops too low.
If Equity = $500 and Used Margin = $100, Margin Level = 500%. Below 100% may trigger a margin call or stop-out.
A Stop Loss protects you from large unexpected market moves. It automatically closes your trade at a predefined loss level, ensuring you don’t lose more than you planned.
If you buy XAUUSD at 2400 and set a Stop Loss at 2395, you only risk 5 points. Even if the market crashes while you’re away, your loss is limited.
Never risk too much of your total account balance on one trade. Small, consistent risks help you survive losing streaks and stay in the game longer.
If your account balance is $500, risking 2% means you should not lose more than $10 per trade. Adjust your lot size and Stop Loss accordingly.
Your lot size determines how much you earn or lose per pip movement. Choosing the wrong lot size can wipe out your account quickly.
If your Stop Loss is 30 pips and you only want to risk $9, your pip value should be $0.30 per pip. That means using a 0.03 lot on most USD pairs.
Your potential reward should always be greater than your risk. This allows you to stay profitable even if not all trades win.
If you risk 20 pips (SL) and aim for 60 pips (TP), your Risk-to-Reward Ratio is 1:3. Winning just 3 out of 10 trades can still make you profitable.
Taking too many trades can lead to emotional decisions and poor judgment. Quality trades are better than quantity.
If you already took 3 solid trades today, it’s better to stop and review instead of chasing the market for more setups.
Leverage can multiply profits but also magnify losses. Always understand the exposure you’re taking before entering a trade.
Trading with 1:500 leverage means every $1 controls $500. If the market moves just 0.2% against you, your $100 account can lose $1 instantly.
Fear and greed are the biggest account killers. Stick to your trading plan and avoid revenge trading after losses.
If you lose two trades in a row, take a break. Don’t increase your lot size out of frustration — that’s how accounts blow up.
Having daily trading limits keeps you disciplined and prevents emotional trading. Once you hit your limit, stop for the day.
If your daily loss limit is $20, stop trading once you reach it. Similarly, if you make $40, lock it in and walk away.
Major news events or data releases can cause unpredictable price swings. It’s often safer to stay out of the market during these times.
If Non-Farm Payroll (NFP) is being released in 5 minutes, avoid opening trades — spreads widen and prices can move hundreds of pips instantly.
Document every trade — entry, exit, reasons, and emotions. Reviewing your trades helps you learn and improve your strategy.
Write down: 'Buy EURUSD at 1.0800, SL 1.0780, TP 1.0840 — based on 1H trendline bounce.' Afterward, note what went right or wrong.