Hi folks,
I'm still in the learning mode and hope someone can clarify some of the pure fundamentals. I believe in strong fundamentals first.
This question is regarding at what point in time the trader will lose his margin.
The base maths;
Account Size: 1000
Base Currency: USD
Pair : EURUSD
Leverage : 1:100
Broker Margin requirement : 1%
Lot Size : 0.1 (mini)
Pip Value : $1
Assuming the current exchange is 1.1500, the margin required to open a 0.1 lot is USD $115 (this is 11.5% of the account, but let's ignore this factor now)
So, for me to open a 0.1 lot with the broker, I have to put $115 given my leverage is 1:100.
The maximum SL for this trade is 115 pips.
Questions;
1. Am I right, if the price moves 115 pips against me then I lose my margin? (opposite, if it moves 115 pips in my favour then I make $115)
2. At what point in time that I get the margin call and then stopped out ?
3. Is it possible to lose more than $115 in this trade if the SL is at 115 pips ? (lets ignore the slippage)
4. Can I lose my account? (meaning getting wiped out)
5. Anything else that I need to be aware or anything is hidden apart from swap, commission, spread?
Hope you can give some advice.
Thanks
I'm still in the learning mode and hope someone can clarify some of the pure fundamentals. I believe in strong fundamentals first.
This question is regarding at what point in time the trader will lose his margin.
The base maths;
Account Size: 1000
Base Currency: USD
Pair : EURUSD
Leverage : 1:100
Broker Margin requirement : 1%
Lot Size : 0.1 (mini)
Pip Value : $1
Assuming the current exchange is 1.1500, the margin required to open a 0.1 lot is USD $115 (this is 11.5% of the account, but let's ignore this factor now)
So, for me to open a 0.1 lot with the broker, I have to put $115 given my leverage is 1:100.
The maximum SL for this trade is 115 pips.
Questions;
1. Am I right, if the price moves 115 pips against me then I lose my margin? (opposite, if it moves 115 pips in my favour then I make $115)
2. At what point in time that I get the margin call and then stopped out ?
3. Is it possible to lose more than $115 in this trade if the SL is at 115 pips ? (lets ignore the slippage)
4. Can I lose my account? (meaning getting wiped out)
5. Anything else that I need to be aware or anything is hidden apart from swap, commission, spread?
Hope you can give some advice.
Thanks
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