DislikedI mentioned a few posts ago that should the account have been in CHF, the loss would be $5k as expected.
But that's not quite the problem, we are trying to figure out the proper exposure for 1:1 leverage when the account is in USD. Remember, our example had the trade opened at parity (a quote of $1 for USD/CHF.) Since it opened at parity, in theory the leverage of 1:1...
But on a USD account, going long on USD/CHF... if USD/CHF dropped by 5000 pips, we'd see a -$10k loss, BUT if USD/CHF went up by 5000 pips, we'd only see a gain of $3333.33......Ignored
You are right.
Thats what i am trying to explain here ...
Its never true leverage of 1:1 unless the pair value is 1.000 and will relatively the leverage keeps shifting once the pair value changes above or below1.00.... unless you add or reduce the position value with the change in the pair value.
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