I just want to make sure about something. If I open an account with GFT Forex and it says 400:1 for a mini account, then if I trade only 1 lot at a time, then I’m taking the same risk pip-wise than if it were paying more for that one lot right? I mean, if I have a 30 pip loss it’s going to cost me the same regardless of the amount I spent on the mini lot right?
Another weird question, am I correct in assuming you pay the spread when you get in and again when you exit your position?
You don’t pay when you exit, I don’t understand the other question, sorry, that’s not a strong point with me…
If I understand your question correctly, you are right. The amount of margin you put up to trade 1 mini contract won’t change the pip value as that comes from the actual size of the position.
Another weird question, am I correct in assuming you pay the spread when you get in and again when you exit your position?
You never “pay” the spread. It is reflected in your position value as soon as you enter a trade.
Actually, the spread is reflected at either the open or the close of the trade depending on which way you’re trading. It always appears to be at the open of the trade because if you get in right at the bid (short position) you haven’t paid the spread yet, but your floating profit starts negative since you have to clear the ask before you can sell, which is when you technically pay the spread. For long positions you’re entering at the ask, so your floating profit shows negative until the ask comes up the amount of the spread. You will exit at the bid but have already paid the spread. However you care to look at it, you only pay the spread once.
You’ve contradicted yourself here, but ended up getting it right.
The spread comes out of your P&L as soon as you open a position because if you go long you do so at the offer and your position will be valued at the bid, and if you go short you do so at the bid and your position will be valued at the offer.
Once you are in a trade there is no spread, you are at
the mercy of the price.
Before you enter a trade the spread is 3 pips, you go long,
s/l 50 pips, t/p 100 pips. Now to achieve your take profit
price needs to move +103 pips, to stop you out it needs to
move -47 pips.
Going short, same t/p & s/l, price needs to go down 103 pips
to achieve your take profit target & up by 47 pips to stop
you out.