Technique · Instructions
Contract specifications: Reading the instrument before the trade
Symbol name, lot, point, tick, costs and execution rules – assign the crucial information in a comprehensible way.
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Where is the information?Do not confuse the unitsA fully disclosed computational exampleRead Execution and LimitationsFinancing, margin and trading hoursUse the specification in the workflowSourcesWhere is the information?
In MT4 and MT5: market overview → context menu of the symbol → specification. The information is provided by the broker. Keep a dated stand during an examination; later conditions do not have to match the condition at that time.
[WATCH4][WATCH5]Our worksheet starts with full icon name, account alias, server, platform build and capture time. Only then do figures follow. Without this assignment, correctly depreciated values may belong to the wrong account or instrument.
Do not confuse the units
| Definitions | What needs to be checked? |
|---|---|
| Symbol | Full name including suffix and product description |
| Lot/contract size | What quantity does a lot of this symbol represent? |
| Digits / Point | Which price resolution is displayed? |
| Tick size/tick value | What is the minimum tradable price change and what monetary value? |
| Minimum volume and step | Which order sizes are actually allowed? |
| Currency of profit and account | In which currency does the result arise and how is it converted? |
“Pip” is a standard market entity that does not have the same definition for each product. Therefore, use the concrete price change and tick size in a calculation instead of transferring a general Forex convention to stocks, gold or indices.
A fully disclosed computational example
Fictitious linear contract: 1 lot equals 100 units; tick size 0.10; tick value 10 EUR per lot; volume 0.20 lot. A movement around 0.50 involves 5 ticks. Your assumed earnings amount is 5 × 10 EUR × 0.20 = 10 EUR, depending on the direction of profit or loss.
This is a self-constructed learning example, not a specification of a real symbol. It assumes a constant tick value in account currency and omits spread, commission, funding and conversion. Other calculation models may work differently.
Check question: If the tick size instead of 0.10 would now be 0.01, without adjusting the specified tick value, the amount of money changed significantly. Therefore, values of different symbols must not be put together.
Read Execution and Limitations
The specification may specify trading mode, execution mode, permitted order types, stop distances, maturities and filling conditions. For example, a symbol can only be released for closing. In MT4, a freeze level can limit changes close to the market.
[WATCH4]MT4 distinguishes instant, request and market execution. In particular, requotes are part of the price acceptance in instant mode; Market execution does not provide for the same re-confirmation of prices. The broker sets the symbol mode.
[EXECUTION4]Our check sequence: Read conditions before the order; then compare exactly the relevant condition and the wording in the case of a rejection. A stopping distance in points is not identical to a money-loss budget.
Financing, margin and trading hours
Cover the financial terms, trading hours, unit of calculation and currencies reported. Clarify commissions and other fees additionally from the price list. The terminal view is part of the documentation, not a replacement for the full contract.
Editorial counter-rehearsal: What would be the costs of opening and closing immediately? Which ones with a longer holding period? Which ones depend on direction, volume or currency? Where information is missing? Put questions in writing instead of assuming missing values as zero.
Use the specification in the workflow
- Before the trade: Check unit and allowable volume.
- Before a stop: Check price direction and minimum distance.
- Before a backtest: record instrument assumptions used.
- Before an account comparison: Identify differences in contract size and cost.
- In case of problems: the then state of the specification with the Diagnosis package secure.
Sources & scope
Check the evidence.
- MT4 · Market overview
Symbol selection and specifications.
Open the source ↗ - MT5 · Market overview
Specifications, symbols and course view.
Open the source ↗ - MT4 · Execution modes
Instant, Request and Market; mode symbol- and broker-dependent.
Open the source ↗
Understand the cost of the entire position
Break down spread and markup, include commission and financing, compare position size and margin itself.
Fee knowledge and interactive calculator →