Hi - I am not yet that experienced in forex
I will give an example of the type of question I am struggling with and with the type I can sove
This is the type I am struggling with (: please can you give me tips /even a solution
Calculate the cost of trade for USD 50 000 (BASE currency) when
USD/ZAR 7.3333 / 7.3336
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This is the type I am comfortable with so no real need for you to read further: (when the amount is in TERMS currency)
USD/ZAR 7.3333 / 7.3336
Terms amount: ZAR 200 000
What is the cost of trade?
200 000 * (7.3336 - 7.3333) = ZAR 60 (in TERMS currency)
ALTERNATIVELY::::
Answer: Spread is (7.3336-7.3333)/0.0001 = 3 pips
Value of TERMS pip: ZAR 200 000 * 0.0001 = ZAR 20
Value of BASE pip: 20 / offer = 20 / 7.3336 = USD 2.73
Cost of trade = amount of pips * value of pip
Cost of trade in TERMS = 3 *(ZAR 20) = ZAR 60
Cost of trade in BASE currency = 3 * (USD 2.73) = USD 8.19
I will give an example of the type of question I am struggling with and with the type I can sove
This is the type I am struggling with (: please can you give me tips /even a solution
Calculate the cost of trade for USD 50 000 (BASE currency) when
USD/ZAR 7.3333 / 7.3336
*
*
*
*
*
*
*
This is the type I am comfortable with so no real need for you to read further: (when the amount is in TERMS currency)
USD/ZAR 7.3333 / 7.3336
Terms amount: ZAR 200 000
What is the cost of trade?
200 000 * (7.3336 - 7.3333) = ZAR 60 (in TERMS currency)
ALTERNATIVELY::::
Answer: Spread is (7.3336-7.3333)/0.0001 = 3 pips
Value of TERMS pip: ZAR 200 000 * 0.0001 = ZAR 20
Value of BASE pip: 20 / offer = 20 / 7.3336 = USD 2.73
Cost of trade = amount of pips * value of pip
Cost of trade in TERMS = 3 *(ZAR 20) = ZAR 60
Cost of trade in BASE currency = 3 * (USD 2.73) = USD 8.19