Clarity with Leverage, Margin, Free Margin, etc

Trading Discussion
1

I am relatively new to forex trading and I still have a couple areas I don’t understand. Using the following as the example:

$500 deposit with a 100:1 leverage which gives me $50000 for trading. I make a trade that profits $100. Does my balance show $600 or does my take profit get divided by the leverage amount which is 100. I have done a ton of searches buy can’t seem to get an answer.

Thanks

2

hehe.
ahh yes, i remember thinking like this

Ok

  1. Totally awesome avatar, thank you for bringing back the classics

  2. Simplify things mate,

if you have an account balance of $500 and you trade and profit $100
you will have a balance of $600 at the end of the trade, obviously .
this is what WILL SHOW in your terminal

but you are not really asking that, are you

You are asking about leverage
and the answer is like this… since you like to confuse the SHYTE out of yourself.
LET THE CONFUSION BEGIN…

if you have a balance of $500 and you have an account Leverage of 1:100
it then means that you can CONTROL $50,000 worth of currency
so then you open a trade at a specific lot size and you make $100

Now what you missed is this…
you didn’t make $100
you made $10,000

but because your account is 1:100
IT HAS ALREADY BEEN DIVIDED UP

but then you didn’t account for Nominal margin either

See… IT’S A HEADACHE… ok hehe

Keep it simple mate
You have $500 in your account
Your terminal tells you you won $100
IT MEANS YOU NOW HAVE $600
simple

3

Thanks, Brother! Exactly what I needed!

4

AAAA… YOUUUUUU RAAAANNNG

hehe

You’re Welcome mate

5

I feel like Lurch with trading at times.

6

and when i trade
i like to listen to this, amongst other metal