Therefore, with an account in which you will have deposited an amount of 1000 Euros and displaying a leverage of 100, you will be able to take positions for an amount of:
- 1000 EUROS X LEVERAGE 100 = 100,000 EUROS
Here, the amount of 100,000 Euros is your maximum exposure. You should never use your full exposure capacity, for obvious reasons of caution.
Margin (amount) and exposure
The margin (which is called “amount” in the Global CTB broker order window earlier in this guide) is a concept related to leverage. This is the amount you mobilize for your operation. This amount, multiplied by the leverage, determines your exposure
Calculation of exposure:
In the example of buying EUR / USD on CTB above, the amount invested (or the margin used) is $ 500, and the leverage is 30. Therefore, the exposure will be:
($ 500 X LEVERAGE 30) = $ 15,000
In other words, by raising $ 500 of capital, you have bet $ 15,000 on the EUR / USD pair. This means that a 1% change in EUR / USD will represent for you a gain of 30% over the $ 500 committed in the position.
Calculation of performance in online trading
Before explaining to you exactly how to trade online and how to choose your broker, it is worth explaining to you the detailed operation of CFDs and the basic calculations to be carried out in order to carry out your online trading activities.
Calculating Profits and Losses in CFD Trading – Pips and Points
The variation of CFDs on stocks, forex or cryptocurrencies is generally not expressed in percentages. Online traders more often talk about change points (or pips for forex). On forex for example, the pip represents the last quotation decimal of a currency pair. So when GBP / USD goes from 1.2000 to 1.2050, the pair is said to have gained 50 pips.