Hey needed help in the calculation of profits.

[avi007i]

Hey I needed help in this.

Suppose I have a deposit of $1000 and trade 0.3 volume, and have a 1: 400 leverage .
and I gain 100 pips. what will be my profit ?

Can someone show me the exact calculations ??

thanks in advance !!

[Wendano]

This will depend on the pair you use.

With 1 Lot:
pip = (pipsize / quote currency value) * lotvalue

Let's say you trade USDCHF standard account:
pip = (0.0001 / 1.0984) * $100,000 = $ 9.1041 (rounded to $9.10)

With your lotsize of 0.3:
pip * 0.3 = pipvalue
$ 9.10 * 0.3 = $ 2.73

Your Leverage is 1:400 so you got 4 times the pipvalue for one pip:
pipvalue * 4 = real pipvalue
$ 2.73 * 4 = $ 10.92

If you make your 100 pips you will get (Spread of 3):
(real pipvalue * 100) - (Spead * real pipvalue) = Money
($10.92 * 100) - (3 * $ 10.92) = $ 1059.24

This is WOW GRATS !

BUT ... lets have a look at the other side:
Your Margin is within the above example $ 300.
Your free margin is $ 700. Some brooker will send you a margin call if you are at 50% of your free margin.

The market is now running 10 pips against you (peanuts) you will have a minus of:
$ 10.92 * 10 = $ 109.20
This $ 109.20 are more that 30 % Minus (feels not really good).

You wait ... you are sure the market will go in your direction....
The market move ... but the next 10 pips against you.
Now you made over 60% minus .... at this time your free margin is down to $ 481.60 !!!
The next 20 pips will really hurt:
Your free margin will lowered by $ 218.40 :
$ 481.60 - $ 218.40 = $ 263.20

The margin call is REALLY not far away.

And this all happens if the market goes only 40 pips against you !
You want the market to go 100 pips in your direction ... think about how easy it is to go 50 pips in the wrong direction.

Just my 2 cents

(Sorry about my bad english)

[avi007i]

thanks a lot man !!
great help...