Function Margin Leverage Against Resistance

Project Forex & Brokerage 5BKP24RS6NCR Function Margin Leverage Against Resistance
For example, your initial capital deposit of $ 300. If you open a position trading mini lots (10000) requires margin: 10000 (mini lots) x 0002 (1:500) = $ 20. So while capital is held as collateral (margin) to open a mini lot gbp / usd is $ 20. So the rest of your margin to withstand the loss is: $ 300 - $ 20 = $ 280.

Profit from currency gbp / usd for mini lot (10000) is $ 1 per point (pip). So with the example above (the remaining margin is $ 280) you can calculate the strength to withstand the loss is $ 280 (left margin) divided by profit per point (pip) = 1 ie: 280 / 1 = 280 points. So the strength to withstand the maximum loss (before the margin call) is 280 points with the assumption that the currency you use is the gbp / usd with a profit of $ 1/point.

Compare with 1:100 leverage, which means you must provide a capital margin of 10 000 x 0.01, ie: $ 100 to open a position mini lots (10000) currency gbp / usd. The remaining margin to withstand the loss is 300-100 = 200. Profit per point gbp / usd mini lot is $ 1. So your strength to withstand the loss is 200 / 1 = 200 points only.

In conclusion: The leverage function doubles the value of your profits with a relatively small initial capital, while increasing your strength withstand loss.