For Cross Currency Rates
Pairs that do not contain the USD (EUR / JPY, GBP / CHF, AUD / JPY, EUR / GBP and GBP / JPY) How to calculate profit / loss are as follows:
Profit = (Selling Price – Purchase Price) x Rate Base Currency Current / Rate Pair x contract size x lot
Example:
Sell one standard lot of EUR / GBP at 0.6760 price (EUR / USD is the base currency of EUR / GBP, because the front of the EUR / GBP is the Base Currency)
Buy a standard lot of EUR / GBP at 0.6750 price Rate EUR / USD: 1.1840
Profit = (0.6760 0.6750) x 1.1840 / 0.6750 x 100 000
Profit = $ 175.4
Margins and Leverage
The term margin leverage in the forex margin trading means that if you want to make trades for $ 10,000, you do not have to provide $ 10,000 but $ 100 is enough to provide meaningful leverage 1:100 as a guarantee fund to your broker. Leverage the value of this variety are usually in a ratio of 1:50, 1:100, and 1:200
So like you have the cash $ 1,000 in broker who has the leverage is 1:100. This means you can trade with the amount to nearly $ 100,000 (or almost 100 times of your capital). This also means that to use a $ 100,000 contract size.
The advantage of the leverage is with a smaller capital you can speculate with a total contract size / lot the same as if you did not use leverage. Or it can be said, with an equal capital, you can use the contract size is greater than not using the leverage. So with the same capital, you have a chance to get profit per pip is greater.