Somebody please help me with this!

Beginner Questions
1

Hello guys, i am just a new entry in the world of forex, i recently made a demo account with a broker which uses MT5 as their trading software. As i opened a new account, i set 5000 as capital and leverage ration 1:100 and made like 10 to 15 pips in real time environment. As i was studying some topics on School of pipsology. I turned it off because i thought to make my hands on it some other time, other day i turned MT5 on and found these facts. can somebody please help me with that

I need to know that why it is showing profit 3390 $ and what about margin, free margin and margin levels ?

2

I would call the broker

3

sorry, i could not understand… whats going on in here !

4

sorry, i could not understand… whats going on in here !

5

I’m assuming that you probably are unfamiliar with the position sizes and pip values.

Balance = self explanatory

Profit = Equity - Balance

Equity = Balance + Unrealized profit/loss (meaning trades that you haven’t liquidated yet)
In the picture above it suggests that you have open trade/s that has/have a total unrealized profit of 3390.51 units.

Margin = The amount of money that you set down as collateral in order to cover the risk of your broker and open a trade.
Since your leverage is 1:100, 1/100 = .01. So your margin is 1% of total trades and if equity is equal to or less than margin you will get margin called.
Your current margin is 4566.30, 4566.30/.01(margin) = 456,630. This suggests that your total open trades has an aggregate value of 456,630 units of your account currency.

Free Margin = Equity - Margin

Margin level = Equity/Margin

So it’s either that your account/platform is screwed up or my assumption is correct. Also the Babypips school is a really great source of information, take advantage of it…

p.s. Look around the site for that Clint Eastwood guy he makes pretty detailed and informative posts.

6

Thank you very much Bun, as i mentioned i am pretty much a newbie. i am already studying all the material provided on pipsology and i ll keep on coming here to study your analysis because right now i am not in position to understand it, i am partially getting it though,
just tell me that from that snapshot, what you think either i am going in loss or i am in position to make some money !
And please tell me a little bit more about Unrealized profit/loss (meaning trades that haven’t been liquidated yet).
What makes them unrealized profit and how do i liquid them into proper/realized profit .
Once again thank you very much for your kind reply, Hope you would do some good trading over there :slight_smile:

7

Hi Babypip1

First of all, welcome to Babypips - the beginner’s guide to forex trading :). Now, let me clarify that what I

posted above wasn’t an “analysis” of the market if that’s what you were saying. Secondly, a person

does not predict whether one’s trades are going to pay off or not just by looking at one’s current account

status(balance,equity,margin etc.). You’re supposed to be analyzing the currency pair that you’re trading.

There are two main types of analysis: Technical(Price action and mathematical indicators etc) and

Fundamental(News and economics etc). There are literally thousands of trading systems and methods for

you to sift through. It is not uncommon for traders to incorporate two or more types of

analysis into their trading method. If I were you I’d mess around with the demo account a bit to see how the

basic mechanics of metatrader work. I’ll further elaborate on the unrealized profit/loss. Basically if I had $1,000 USD in my

trading account and I opened a 10,000 units (0.1 standard lot) buy order on a currency pair such as

GBP/USD, I will gain an unrealized profit of $10 if the currency pair moved up by 10 pips. This shows up in

your account status as “Balance: $1000, Equity: $1010.” It’s unrealized because it exists on paper but has

yet to be cashed in. And because the market fluctuates it could eventually turn into an unrealized loss. To

prevent that from happening you have to close your order to lock in your profits and “realize” the gain. After

you have done that your account status will appear as “Balance: $1010, Equity: $1010.”

Just a piece of friendly advice Babypips1:
Although everybody starts from being a newbie, try to avoid asking questions with answers that you can

easily find in the Babypips school or on google. Personally speaking I don’t mind, but spoonfeeding is

generally looked down upon on trading forums. No offense intended :). This is a tough business and

independence is one of the prerequisites to becoming a profitable trader. Good luck.

8

Well, if it were real money i guareantee hyou that the exact opposite would happen.

9

Thanks Bun, you are very kind … i am literally enjoying it as much as i am understanding this business . and i acknowledge that i must not ask for spoonfeeding :slight_smile: Well now i totally understand unrealized/profit loss after you elaborated it so nicely for me . :slight_smile: and i appreciate your encouragement for newbies like me . Only one question, once we have a certain amount of unrealized profit/loss, how difficult or possible it is to transfer these funds to over capital !!

10

Mr Gone, what d0 you mean, how opposite ? like i was to lose 3000 + dollars from my capital or what ?

11

Are you talking about closing your trades? If yes, I trade with Oanda’s MT4 (both live and demo) and it usually takes around 1-3 seconds for the orders to be closed.

12

oh Bun i am really sad :frowning: i stopped trading after previous figures as i was studying forex, i thought let it leave and i ll check the results later, and now i am shocked to see that profit has decreased at exponential level. and because i think i didn’t close the trades . if i had closed these trades earlier when profit was 3000+ dollars. then it might have shifted to total balance ?

13

Yes.

Don’t worry buddy that’s what demo accounts are for. It’s a good thing that you’re upset because it means that you’re treating it like real money. Also, you should learn proper risk management. 30% equity swings in a few days time suggests overleverage. I think you’re gonna get margin called real soon.

14

Hello Bun, don’t want to disturb you again and again but here i did some more trading and earned some bucks, thought to share it with you … i hope you would also be doing some good business there !! best of luck .