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Forex trading example


Example 1:
Do more GBP/USD (GBP/USD)

On the first Friday of the month, the current GBP/USD transaction price is assumed to be 1.6286/1.6288.


Traders are concerned about the employment situation in the United States, and it is expected that the actual non-agricultural population income level will be more serious than economists expected. You expect the dollar to be weak, the pound will be stronger against the dollar, and it is decided to buy (long) 10,000 pounds at a price of 1.6288 at the GBP/USD exchange rate.

 

In order to make this trade, you choose a leverage of 50:1 and an initial margin of (10,000*1.6288/50), which is $325.76. As you expected, the pound is stronger against the dollar, when the GBP/USD price is 1.6350, Hello, you decide to cash in profits. The new price is 1.6350/1.6352 and the selling settlement price is 1.6350.

Result one


The buy price is 1.6288 and the sell price is 1.6300, up 62 points. Your profit is: (1.6300 – 1.6288) x 10,000 = $2.

The profit/loss is calculated according to the denomination currency in the currency group. Profit/Loss Calculation: The difference between the closing price and the opening price x quantity.

Result 2


However, if the actual non-agricultural population income data is better than expected, the dollar is stronger than the pound. If the GBP/USD exchange rate drops to 1.6230, you will lose (1.6288 - 1.6227) x 10,000, or $300

Example 2: Short EUR/USD (EUR/USD)

In mid-July, the EUR/USD transaction price was 1.4360/1.4361.

Investors are still worried about the impact of the sovereign debt crisis, and you expect the euro to fall relative to the dollar. You decide to sell (short) £10,000 at the price of EUR/USD 1.4360.

In order to make this trade, you choose a leverage of 20:1 and an initial margin of (10,000*1.4360/20), which is $718.00.

Result one


Assuming you are correct, the euro depreciates against the dollar. When the EUR/USD price is 1.4251, you decide to close the position to redeem the profit. The new price is 1.4250/1.4251 and your buy-in closing price is 1.4251.

Result: Your buy price is 1.4360, the sell price is 1.4251, down 109 points, and the profit is: (1.4360 - 1.4251) x 10,000 = 109 USD.

Result 2


If the dollar is weak overnight, pushing the euro up 130 points to 1.4490, you will lose (1.4490 – 1.4360) x 10,000, or $130.

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