Home > Learn FX Trading > FX Day Trading Platform - Closing the Forex Deal Manually and Limiting Orders

Closing the Forex Deal Manually and Limiting Orders

Using the deal defined in the screen shot above, the deal definitions are: Buy USD; sell EUR; EUR10,000; Deal rate 1.1952; Stop-Loss 1.2052; no Take-Profit defined; margin USD 100.

The table below shows what would occur under various scenarios:

Closing Rate  Profit / Loss Comments Change
in Exchange Rate		 Rate of return on investment
1.2200 Loss USD 100.00 Maximum loss; the deal was automatically closed already on 1.2052 -2.0% -100%
1.2150    Loss USD 100.00 Maximum loss; the deal was automatically closed already on 1.2052 -1.6% -100%
1.2100 Loss USD 100.00 Maximum loss; the deal was automatically closed already on 1.2052 -1.2% -100%
1.2050 Loss USD 98.00   -0.8% -98%
1.2000 Loss USD 48.00   -0.4% -48%
1.1950 Profit USD 2.00   0.0% 2%
1.1900 Profit USD 52.00   0.4% 52%
1.1850 Profit USD 102.00   0.9% 102%
1.1800 Profit USD 152.00   1.4% 152%
1.1750 Profit USD 202.00   1.9% 202%
1.1700 Profit USD 252.00   2.4% 252%
         

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.

 

To learn more about the trading advantages of Easy-Forex,
Join Easy-Forex (registration is quick and free, no obligation):
www.Easy-Forex.com

Limit Forex 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. Easy-Forex 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.