Market theory - page 213
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Again for the downers - in the first option, you open for $10,000.
In the second, you open for $100.
Now the question - THIS IS THE FUCKING SAME NUMBER OF LOTS?????
I gave you the link. The rest is up to you. If it comes through, well done! If it doesn't - well, no...
))))))
In both examples, you have $1,000 of equity.
With 1:100 leverage, you open a $10,000 position. With leverage 1: you open a position for $100. In both cases, you take a profit of 50 pips.
Are your profits*100%/1000 dollars the same or different in the two options?
Try to spell out what I am writing - it is not about the intimate details of money management, type of market or specificity of the instrument - at the end of the week on Saturday morning you look at your deposit and state a 0.5% increase. That's it.
Well, it happens - you've said something stupid and only noticed it after it was published! Don't worry, we'll all pretend we didn't notice it.
Try to spell what I am writing - it's not about the intimate details of money management, type of market or specifics of the instrument - at the end of the week on Saturday morning you look at your deposit and note an increase of 0.5%. That's it.
OK, let's look at the other side.
You have $1,000 and a leverage of 1:100. That is, all your capital is $100,000. You trade it and earn 0.5% for the week - that's $500. That is, the profit to equity is 500/1000 = 50%.
You have $1,000 and a leverage of 1:1. That is, all your capital is $1000. You trade with it and earn 0.5% for a week, which is $5. So the profit to equity is 5/1000 = 0.5%.
OK, let's look at the other side.
You have $1,000 and a leverage of 1:100. That is, all your capital is $100,000. You trade it and earn 0.5% for the week - that's $500. That is, the profit to equity is 500/1000 = 50%.
You have $1,000 and a leverage of 1:1. That is, all your capital is $1000. You trade with it and earn 0.5% for a week, which is $5. So the return to equity is 5/1000 = 0.5%.
To start with, it would be a good idea to learn how to count the percentages. In Windows Start, All Programs, Standard - Calculator. Or Mechanical, Electronics...
OK, let's look at the other side.
You have $1,000 and a leverage of 1:100. That is, all your capital is $100,000. You trade it and earn 0.5% for the week - that's $500. That is, the profit to equity is 500/1000 = 50%.
You have $1,000 and a leverage of 1:1. That is, all your capital is $1000. You trade with it and earn 0.5% for a week, which is $5. So the return to equity is 5/1000 = 0.5%.
Once again I emphasize your attention that we are talking about the size and growth of the deposit. There is no notion of leverage for the deposit; it appears when you open a position. When you open a position in DC in the Forex market, you can indeed enter with the whole deposit, 1/10 of a deposit or 1/100, to open several positions on one pair or on different ones - all this is determined by the characteristics of your TS and MM. We are talking about something else, namely, that as a result of all the actions at the end of the week your deposit has grown by a certain amount of 0.5%
In short, there is a deposit at entry and a deposit growth at exit, and there is nothing in the middle. The leverage has NOTHING to do with profitability. Soros is a sucker, Buffett is a sucker, etc.
And Buffet with his 0.5% yield manages billions of other people's money just because his investors are very dumb and can't find "geniuses" with PAMM-accounts in kitchens, who make thousands of percent a year.
Good for you!
In short, there is a deposit at entry and a deposit growth at exit, and there is nothing in the middle. The leverage has NOTHING to do with profitability. Soros is a sucker, Buffett is a sucker, etc.
And Buffet with his 0.5% yield manages billions of other people's money just because his investors are very dumb and can't find "geniuses" with PAMM-accounts in kitchens, who make thousands of percent a year.
Well done!
Once again, I would like to emphasise that we are talking about the size and growth of the deposit. There is no concept of leverage for a deposit, it appears when you open a position. When you open a position in DC on forex, you can indeed enter with the whole deposit, 1/10 of a deposit or 1/100, to open several positions on the same pair, or on different ones - all this is determined by the peculiarities of your TS and MM. This is not about that, namely about the fact that as a result of all these actions at the end of the week your deposit has increased by a certain amount of 0.5%.