Euro Dollar Forex Trading Examples

Suppose the trader opens a forex account by depositing $50,000 into their account

Let’s assume that the current price is 1.3500 in the EURUSD parity. The direction of the position that the investor, who expects a move in favor of the Euro, will take in the EURUSD parity will be LONG/LONG.

1 LOT= 100,000 Pieces = 100,000 EURO = 135,000 USD will get a position size. (100.000 EURO, sold for 135.000 Dollars)

10% of the position size to be taken for this transaction will be used as collateral from the balance in our account. In this case;

Initial Margin = $135,000 / 10 (Leverage Ratio) = $13,500 (A margin of $13,500 will be reserved for position opening from the account.)

In summary, the investor;

1 LOT= 100,000 Euros = $135,000 has opened an upward position with a Position Size.

If the EURUSD pair rises to 1.3600 (100 pips increase), what will be the Profit/Loss situation on the investor’s account?

Since 1 LOT = 100,000 Pieces = $136,000 will reach a Position Size,

Position Size difference $136,000 – $135,000 = A profit of $1,000 will be credited to the trader’s account.

If the trader traded 0.10 LOT, the following situation would occur:

0.10 LOT= 10.000 Pieces= 10.000 EURO in size = 13.500 USD will take a position size. (Received 10,000 EURO, sold for 13,500 USD)

10% of the position size to be taken for this transaction will be used as collateral from the balance in our account. In this case;

Initial Margin = $13,500 / 10 (Leverage rate) = $1,350 (A $1,350 margin will be allocated for opening positions in the account).

0,10 LOT = 10,000 Euros = 13,500 Position Size has opened an upward position.

What kind of Profit/Loss situation will occur in the investor’s account if the EURUSD parity rises to 1.3600 (100 pips increase)?

0.10 LOT = 10,000 Euros = $13,600 since it will reach a Position Size,

The position size difference is $13,600 – $13,500 = a profit of $100 will be reflected in the trader’s account.