Trading Commission and leverage related question

Beginner Questions
1

I have a question.

If $1000 is invested to trade forex with a leverage ratio of 1:100 than one can trade a lot of $100000, if that is true, than the profit will be $10 for 1 pip moves higher than the buying price. Now the question is from that $10 profit how much money trader will get? will the trader have to pay the broker a portion of the profit? or the trader will receive all the profit?

another question is- suppose from the 1st trade trader made $10 from a $1000 investment at 1:100 leverage. After trader close the trade, will the balance be $1010 ? if yes then after trader open another trade, will the leverage be 1010: (1010 x 100) ?

Please explain.

2
  1. You must overcome the spread to make profit first or pay a commission to the broker.
    Example:

USD/JPY bid 101.90 ask 101.93, three pip spread you must overcome to first break even.

3

As the TheDarkKnight said you will have to overcame the spread first which means that is the broker’s commission. And yes if your trade made $10 on $1000 investment your balance will be ($1010 x leverage).

4

Thanks, the answer was helpful :slight_smile: