A question on my ctrader demo account regards leverage

Hey folks.

Chris here, from UK

I have been watching all the youtube videos and have read a couple of forex books and have recently started tinkering with a demo account with ctrader.

I have an account with a 1:10 and an account with a 1:100 leverage option

If I make enter the exact same position on both accounts, I make or lose the exact same amount, whereas I would expect the 1:100 account to have a tenfold profit or loss.

Can somebody be so kind as to put me right please?!

i would hope so, yes - otherwise something’s very, very wrong! :slight_smile:

i’m not sure why you’d expect that?

the pip value of the currency-pair you trade is fixed

it doesn’t depend on which platform you’re using or whether it’s demo or funded, or what your leverage is

i’m wondering whether you’re possibly confusing leverage with margin, or something similar?

i hope this will help you: i would start here:-

actually, i would start on page 1 of the course, but the page linked to above is the one that should help you with this specific question, i think

Hello there!

Thanks for taking the time to reply… I have started on the course and understand most of the basic stuff - but this leverage thing is really confusing me! And i don’t want to go any further until I’ve got this sussed. I’m sure its easy to get my head around but the penny is just not dropping!!!

I just cant fathom how two different accounts with hugely different leverages are churning out the exact same results!

I think I need to go for a walk!

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we must be talking at cross-purposes, then, which means my response above didn’t help you - sorry! :frowning:

why would you expect them to produce different results?

the quantity you bought/sold isn’t any different, and the pip-value isn’t, either

does an example help? if you buy (let’s say) 0.1 lots of EUR/USD, and the price goes up 8 pips and then you sell it, you’re going to win $8, whatever your leverage, because EUR/USD has a pip-value of $10 per lot, or $1 per pip for 0.1 lots (one mini-lot), and your leverage can’t change that fixed reality

what it can change is how much of your account margin is used up by buying it, but you get that back when you close the trade anyway

and by the way, welcome to the forum, and well done for using ctrader rather than metatrader, that was a very good decision!

Hi Flamingo

I’ve just done a little more tinkering and have found that I can buy more lots (Mini lots, etc) in my 1:100 account so there is something to look more into.

I think I need to drink some beer and come back to this tomorrow with a fresh head!

Using your example, above - If I’m going to win $8 whichever account I use, then what is the advantage of a 100:1 account?

to me - and i hope to you - there’s no advantage

to someone who likes gambling, or to someone who wants as little account-margin to be used up by each position they open, or to someone who wants to risk huge position-sizes without having much margin in the account, or to someone who wants to have a huge number of different trades all open at the same time without using up all their margin - well, all those people would say that 1:100 leverage is “advantageous” to them (they’re all losers, in the long run, of course - which is why leverage like that isn’t allowed with brokerages regulated in Europe, Australia, America, etc. etc.) :wink:

By Crikey, I think its dawning on me. Everso slightly - and I will need to think more about this, of course!

So do you trade? (If you don’t mind me asking?!)

And if so - do you not use leverage?

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i trade currency futures more than spot forex, but yes, i trade, including spot forex (there aren’t always futures available for what i want to trade)

i use leverage - but conservatively

i don’t need big leverage, because i don’t want to open huge positions compared with the amount of money in my accounts

leverage of 1:30 is fine, for me (i could handle less - i never actually use up all the leverage available to me anyway)

Thanks for taking the time to answer my questions - you’ve been a great help and have given me a new angle to approach my thinking.

Muchly appreciated!

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