Equity/Balance Problem for a Newbie

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Let's take an exemple.

I want to buy 1 lot of EURUSD. I have a balance of 5000 EUR on my account.
I need 300 EUR of Margin to open the lot. The spread is 5 pips (50 EUR).

I open the position and I check my equity and my balance just after.

How many EUR will be in my Equity account?
5000? or
4950? (Initial Balance - Spread)

Is the spread stored in the Equity?

Is the spread immediatly paid and directly deduce from the Balance? 4950 or 5000 EUR?


Thanks in advance to help a newbie!

 

Open a demo and look at the numbers.

 
PaulHister:

Let's take an exemple.

I want to buy 1 lot of EURUSD. I have a balance of 5000 EUR on my account.
I need 300 EUR of Margin to open the lot. The spread is 5 pips (50 EUR).

I open the position and I check my equity and my balance just after.

How many EUR will be in my Equity account?
5000? or
4950? (Initial Balance - Spread)

Is the spread stored in the Equity?

Is the spread immediatly paid and directly deduce from the Balance? 4950 or 5000 EUR?

Thanks in advance to help a newbie!


it's (Initial Balance - Spread) but not 4950

because 5 pips spread is 5 * secondary currency * lot

for example "EUR/USD" = 5* usd * lot & "EUR/NZD" = 5*NZD*lot

 
PaulHister:

Let's take an exemple.

I want to buy 1 lot of EURUSD. I have a balance of 5000 EUR on my account.
I need 300 EUR of Margin to open the lot. The spread is 5 pips (50 EUR).

I open the position and I check my equity and my balance just after.

How many EUR will be in my Equity account?
5000? or
4950? (Initial Balance - Spread)

Is the spread stored in the Equity?

Is the spread immediatly paid and directly deduce from the Balance? 4950 or 5000 EUR?


Thanks in advance to help a newbie!


Your equity will be 4950 because the open trade will have a -50 floating loss at that time.

The reason the -50 floating loss exists is because you bought the position at a price (the ask) which was higher than what you could immediately sell it for (the bid).

That means you opened the position and it was already under-water by -50 euro.

 

Thanks a lot for your answers qjol and 1005phillip. I have another question ;P


AccountStopoutMode = 0 - calculation of percentage ratio between margin and equity;

That's "just" Margin / Equity? Or Equity / Margin ?


If AccountStopoutLevel() return 10.

Margin / Equity must be > 0.1 else the broker will close my positions?


Thanks, Paul


 
Are you sure it's Margin / Equity? and not Equity / Margin?
 
PaulHister:

Thanks a lot for your answers qjol and 1005phillip. I have another question ;P


AccountStopoutMode = 0 - calculation of percentage ratio between margin and equity;

That's "just" Margin / Equity? Or Equity / Margin ?


If AccountStopoutLevel() return 10.

Margin / Equity must be > 0.1 else the broker will close my positions?


Thanks, Paul



Sorry, I have no idea.
 
  1. How many EUR will be in my Equity account?
    5000? or
    4950? (Initial Balance - Spread)
    If you buy it will be initial - spread * value per pip. Value per pip depends on the pair and your account currency. If the pair doesn't contain the account currency like USDJPY then the value also depends on the pair price.
  2. Is the spread stored in the Equity?
    No. It's from the broker and some brokers have variable spreads.
  3. Is the spread immediatly paid and directly deduce from the Balance? 4950 or 5000 EUR?
    If you buy you open at the Ask and close at the Bid. The spread is immediately paid. If you sell you open at the Bid and pay the spread when you close.
 

It might be useful for you to read the following article here:

https://www.mql5.com/en/articles/1453

It gives some basics on what's going on.

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