Pips, Lots and Leverage Explained: How a 1% Move Costs 30% (Lesson 2)

We just published a new video on MCP Labs Forex. It covers Pips, Lots and Leverage Explained: How a 1% Move Costs 30% (Lesson 2). Watch it here and read our summary below.

What this video covers

Lesson 2 for beginners: what a pip is (including yen pairs and pipettes), what a lot is and how much each pip is worth (EURUSD, USDJPY and gold), what leverage and margin really are, how margin calls and stop outs work, and the leverage mistake that wipes out more beginners than anything else.

Lesson 2 of the free course "Forex From Zero to Automated" by MCP Labs Forex.

Next lesson: Lesson 3: Brokers, spreads and the hidden costs

QUIZ: You buy 0.05 lots of EURUSD and the price moves 40 pips in your favour. How much did you make? Answer in the comments.

CHAPTERS

0:00 How a 1% move can cost 30%

0:48 What a pip is (and yen pairs)

1:40 Lots and what one pip is worth

2:56 Leverage and margin

4:15 Margin calls and stop outs

4:55 Your questions

6:29 The mistake that wipes out beginners

6:52 Recap, quiz and homework

Sources: Leverage limits and margin close-out: ESMA retail CFD measures. Prices: Yahoo Finance to 9 Oct 2026.

Education, not financial advice. Trading forex, gold and CFDs on margin is high risk; practise on a demo account first. Narration voice is AI-generated.

A product of MCP Labs, created by Tshivhidzo (Moss) Mbedzi.

Run the EA from these videos

Everything shown here runs on Apex Drawdown Zero for MT5 — a selective MT5 Expert Advisor with a stop-loss on every trade and risk-based sizing (V9 has no account-level drawdown halt; V12 does). See more clips on our videos page or subscribe on YouTube.

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*Any results, returns or win rates mentioned in this video are examples from specific accounts and periods and are not typical or guaranteed. Trading carries substantial risk of loss. Past performance is not indicative of future results — read our full risk disclosure.*