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Trading Examples

Further we will review some real examples of profit making in Forex, Futures, Indices and Contracts for Difference. Using the multifunctional trading platform MetaTrader 4 the realization of following transactions on your real trading account would lead to absolutely similar results.
1. Buying EUR/USD currency pair in Forex Market 
  • Initial conditions: funds on the deposit (trading account): 100 USD. Credit leverage chosen by the client: 1:200.
  • For instance, at 09:15 h. we purchase 0.1 Lot of the European currency (in real terms 10 000 units) at the price of 1.5415 USD for 1 EUR. Without a leverage, buying such amount of Euros would require the whole 1.5415*10000 = 15415 USD.
  • Admiral Markets Ltd. grants the clients an interest-free credit leverage up to 1:200, therefore in this case for a fulfillment of the transaction we need only 15415/200 = 77.08 USD of free funds on the trading account.
  • One pip (i.e. a change in the exchange price of 0.0001) is equal to 1 USD of profit or loss for a trader when a volume of a EUR/USD trade is 0.1 Lot.
  • Later that day, at 21:45 h. the price reaches the value 1.5550. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s opening price and closing price is 1.5550-1.5415 = 0.0135 (i.e. 135 pips).
  • The profit earned equals 135*1 = 135 USD. So the total funds on the trading account after the position is closed: 100+135 = 235 USD. As a result, return on investments (from the initial deposit) is 135% in 12 h. 30 min.
  • If we had opened a Buy position of 0.01 Lot (using 7.71 USD of funds on our account), the received profit would have been 13.50 USD. If we had opened a Buy position of 1 Lot (using 770.75 USD of funds on our account), the profit would have been 1350 USD.

2. Selling EUR/USD currency pair in Forex Market 

 

  • Initial conditions: funds on the deposit (trading account): 2000 USD. Credit leverage chosen by the client: 1:100.
  • At 09:10 h. we open a EUR Sell position of the volume of 1 Lot (in real terms 100 000 units) at the price of 1.5730 USD for 1 EUR. For opening of such position it’s not required to previously purchase the Euro currency (or have it on the trading account) because all financial operations will be calculated with US dollars, i.e. in the deposit currency. Without a leverage, selling such amount of Euros would require the whole 1.5730*100000 = 157300 USD.
  •  The leverage of 1:100 is enabled, so in this case for fulfillment of the transaction we need only 157300/100 = 1573 USD of free funds on the trading account.
  • One pip (i.e. a change in the exchange price of 0.0001) is equal to 10 USD of profit or loss for a trader when a volume of a EUR/USD trade is 1 Lot.
  • Later that day, at 15:55 h. the price reaches the value 1.5640. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s opening price and closing price is 1.5730-1.5640 = 0.0090 (i.e. 90 pips).
  • The profit earned equals 90*10 = 900 USD. So the total funds on the trading account after the position is closed: 2000+900 = 2900 USD. As a result, return on investments (from the initial deposit) is 45% in 6 h. 45 min.
  • If we had opened a Sell position of 0.01 Lot (using 15.73 USD of funds on our account), the received profit would have been 9 USD. If we had opened a Sell position of 0.1 Lot (using 157.30 USD of funds on our account), the profit would have been 90 USD.

3. Buying Crude Oil Futures (Contracts for Difference) 

  • Initial conditions: funds on the deposit (trading account): 1000 USD.
  • At 14:15 h. we take the decision to purchase 0.5 Lot of Light Sweet Crude Oil (#QM) at the price of 137.55 USD for one barrel (while the standard contract of 1 Lot equals 500 barrels of oil). Without dependence from a credit leverage, the margin requirements for 1 Lot of Crude Oil are set to 1350 USD, so for the purchase of the half of a Lot it’s required only 1350*0.5 = 675 USD of free funds available on the trading account.
  • One pip (i.e. a change in the oil price of 0.01) is equal 2.50 USD of profit or loss for a trader when a volume of a trade is 0.5 Lot (for a round Lot one pip is equated to 5 USD as indicated in the #QM specification).
  • Next day at 16:30 h. the oil price reaches the value of 144.70 USD for 1 barrel. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s opening price and closing price is 144.70-137.55 = 7.15 USD (i.e. 715 pips).
  • The profit earned equals 715*2.5 = 1787.50 USD. As indicated in the #QM specification, a commission to the broker for transferring of our position to the following day (Swap Long) should be 10*0.5 = 5 USD. So the total funds on the trading account after the position is closed: 1000+1787.5-5 = 2782.5 USD. As a result, return on investments (from the initial deposit) is 178.25% in less than one day.
  • If we had opened a Buy position of 0.01 Lot (using 13.50 USD of funds on our account), the received profit would have been 35.75 USD. If we had opened a Buy position of 1 Lot (using 1350 USD of funds on our account), the profit would have been 3575 USD.

4. Buying Microsoft Corp. equities (Contracts for Difference) 

  

  • Initial conditions: funds on the deposit (trading account): 3000 USD. Credit leverage for all US Stocks CFDs: 1:10.
  • At 15:05 h. after the trading session opening at the NASDAQ Stock Exchange (USA) we accept the decision to purchase 500 CFDs (i.e. 500 shares) of Microsoft Corporation at the price 25.25 USD for one share (the total amount of transaction is 500*25.25 = 12625 USD). With the help of 1:10 credit leverage, for fulfillment of this transaction we need only 12625/10 = 1262.50 USD of free funds available on the trading account + the commission to the broker would be 500*0.06 = 30 USD (as indicated in [MSFT] specification).
  • Later that day at 19:15 h. the price reaches 26.45 USD for one share. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s opening price and closing price is 26.45-25.25 = 1.20 USD, i.e. the cost of 500 shares now makes 500*26.45 = 13225 USD.
  • The profit earned equals 13225-12625 = 600 USD. So the total funds on the trading account after the position is closed: 3000+600-30 = 3570 USD
5. Buying [DJI30] index CFD 
  • Initial conditions: funds on the deposit (trading account): 300 USD.
  • At 16:05 h. we take the decision to purchase 1 lot of [DJI30] (i.e. 1 contract for difference of Dow Jones Industrial Average Index) at the price of 7910 USD. Our margin requirements for index trading are 2% of the transaction size, so for the purchase of one lot it's necessary to have 7910*0.02 = 158.20 USD of free funds available on the trading account.
  • One index point (i.e. a change in the price of 1.0) is equal 1 USD of profit or loss for a trader when a volume of a trade is 1 Lot, as indicated in the [DJI30] specification.
  • The same day at 17:15 h. the index reaches a value of 7972. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s closing price and opening price is 7972-7910 = 62 index points.
  • The profit earned equals 62*1 = 62 USD. So the total funds on the trading account after the position is closed: 300+62 = 362 USD.
6. Selling [FTSE100] index CFD
  • Initial conditions: funds on the deposit (trading account): 1500 USD.
  • At 11:25 h. we take the decision to purchase 5 lots of [FTSE100] (i.e. 5 contracts for difference of Financial Times Stock Exchange 100 Index) at the price of 3987.5 GBP. For opening of such position it’s not required to previously purchase the index CFD. Our margin requirements for index trading are 2% of the transaction size, so for the purchase of one lot it's necessary to have 3987.5*0.02*5 = 398.75 GBP.
  • For example, the Forex market rate of GBP/USD currency pair is currently equals 1.4992. Converting to USD currency, we will need 398.75*1.4992 = 597.81 USD of free funds available on the trading account in order to open the position.
  • One index point (i.e. a change in the price of 1.0) is equal 5 GBP of profit or loss for a trader when a volume of a trade is 5 Lots, as indicated in the [FTSE100] specification.
  • The same day at 13:10 h. the index reaches a value of 3965.0. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s opening price and closing price is 3987.5-3965.0 = 22.5 index points.
  • The profit earned equals 22.5*5 = 112.5 GBP. For example, the Forex market rate of GBP/USD currency pair is currently equals 1.4933. Converting to USD currency, we have earned 112.5*1.4933 = 168 USD. The total funds on the trading account after the position is closed: 1500+168 = 1668 USD.
7. Buying US Dollar Index Future CFD (#DX)
  • Initial conditions: funds on the deposit (trading account): 500 USD.
  • At 11:55 h. we take the decision to purchase 1 lot of #DX (i.e. 100 contracts for difference of US Dollar Index Future) at the price of 84.958 USD. Our margin requirements for index trading are 2% of the transaction size, so for the purchase of one lot it's necessary to have 84.958*100*0.02 = 169.92 USD of free funds available on the trading account.
  • One point (i.e. a change in the price of 0.01) is equal 0.10 USD of profit or loss for a trader when a volume of a trade is 1 Lot, as indicated in the #DX specification.
  • The same day at 12:59 h. the index reaches a value of 85.450. Let’s admit that the decision to take profit is made exactly in this point. It is possible to close a trading position manually, directly from the MetaTrader 4 terminal, but we also had the possibility to set the pending Take Profit order in advance, which would be executed automatically on the Admiral Markets Ltd. trading server at the indicated price.
  • The difference between the position’s closing price and opening price is 85.450-84.958 = 0.492, i.e. 492 points.
  • The profit earned equals 492*0.10 = 49.20 USD. So the total funds on the trading account after the position is closed: 500+49.20 = 549.20 USD.

 



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