Using the deal defined in the previous page, the deal definitions are: Buy USD; sell EUR; EUR5,000; Deal rate 1.12043; Stop-Loss 1.13043; no Take-Profit defined; margin AUD 65.35.

The table below shows what would occur under various scenarios:

Please swipe left and right to see complete table.
Closing Rate Profit / LossCommentsChange
in Exchange Rate
Rate of return on investment
1.2200Loss USD 100.00Maximum loss; the deal was
automatically closed already on 1.2052
1.2150Loss USD 100.00Maximum loss; the deal was
automatically closed already on 1.2052
1.2100Loss USD 100.00Maximum loss; the deal was automatically closed already on 1.2052-1.20%-100.00%
1.2050Loss USD 98.00-0.80%-98.00%
1.2000Loss USD 48.00-0.40%-48.00%
1.1950Profit USD 2.000.00%2.00%
1.1900Profit USD 52.000.40%52.00%
1.1850Profit USD 102.000.90%102.00%
1.1800Profit USD 152.001.40%152.00%
1.1750Profit USD 202.001.90%202.00%
1.1700Profit USD 252.002.40%252.00%

The table shows the effect of ‘leveraged’ trading: the trader invests USD 100, for a EUR 10,000 contract. Therefore, a small change in the currency exchange rate reflects a much higher change in value.

The Trader may lose up to 100% of the investment (USD 100), but can gain an unlimited profit.

The table also illustrates the value of PIPs. In this deal, every PIP (the fourth decimal digit) results in a profit or loss of USD 1.00 to the trader. So long as the trader gains on this deal, each PIP is worth $1 on a $100 margin leveraged at 1:100.

Limit Orders (reserving a Day-Trading deal)

Some dealing rooms and platforms offer the trader the ability to set a “reserved” rate for a deal, that would “capture”, if and when such a rate occurs in the market, resulting in a Day-Trading deal.

The trader can define the rate he/she wishes, letting the platform do the watching, until (if and when), it appears in the market. easyMarkets does not charge additional fees for Limit Orders. Setting up a Limit Order is very similar to the process described above for Day-Trading. Should the reserved deal not be realized, the funds which were allocated for it will be returned to the trader’s account.

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