Hi guys
Newbie here want to clarify about margin trading and profit. Let’s say if I open an mini account with $1000 and leverage 1:100. How much will my account balance show? $1000 or $100000? I understand that I’ll have a buying power of $100000 but I don’t understand how does it calculate for profit/loss??
Let’s say I made 100 pips and I made $500 profit, will it be added to my original deposit $1000 or leverage capital of $100000?
Many thanks
It would be added to your original deposit.
Bear in mind losses have the same net effect on your account.
If you were to setup properly you would probably be risking a minimum of $250 if you’re practicing good risk reward (assuming a 1:2 risk reward ratio). That would reflect a 25% account risk, which is way more than you should risk on one trade.
Your account balance will always show your actual cash.
Many thanks seniors … Demo accounts initials funds ($100000) make me really confused on my understanding of margin and leverage…