Trade Example 1 – Long position with profit (Day trading)

Currency Pair:   USDJPY                 (USD is the Base currency and JPY is the Quote currency)

Bid/Ask Price:    103.640/103.652 (Spread = 0.012 or 1.2 pips)

Trader believes USD will appreciate against JPY. He/she buys 100,000 USDJPY @ 103.652 (Entry price)

Trade Value = 100,000 * 103.652 = JPY 10,365,200

Initial Margin @ 5% = JPY 518,260

Commission @ 0.40 bps = 10,365,200 * 0.00004 = JPY 414

Later in the day Bid/Ask Price:    103.725/103.738 (Spread = 0.013 or 1.3 pips)

Trader decides to close out position to take profit. He/she sells 100,000 USDJPY @ 103.725 (Exit price)

Trade Value = 100,000 * 103.725 = JPY 10,372,500

Commission @ 0.40 bps = 10,372.500 * 0.00004 = JPY 415

Gross Profit = Quantity * (Exit price – Entry price) = 100,000 * (103.725 - 103.652) = JPY 7,300

Net Profit = Gross profit – Commission = JPY 7,300 – JPY 829 = JPY 6,471

Trade Example 2 – Long position with loss (Day trading)

Currency Pair:   EURUSD               (EUR is the Base currency and USD is the Quote currency)

Bid/Ask Price:    1.11501/1.11508   (Spread = 0.00007 or 0.7 pips)

Trader buys 100,000 EURUSD @ 1.11508 (Entry price)

Trade Value = 100,000 * 1.11508 = USD 111,508

Initial Margin @ 5% = USD 5,575

Commission @ 0.40 bps = 111,508 * 0.00004 = USD 4.46

Later in the day Bid/Ask Price:    1.11445/1.11452 (Spread = 0.0007 or 0.7 pips)

Trader decides to close out position to cut loss. He/she sells 100,000 EURUSD @ 1.11445 (Exit price)

Trade Value = 100,000 * 1.11445 = USD 111,445

Commission @ 0.40 bps = USD 4.46

Gross Loss = Quantity * (Exit price – Entry price) = 100,000 * (1.11445 - 1.11508) = USD 63

Net Loss = Gross Loss + Commission = USD 63 + USD 8.92 = USD 71.92

Trade Example 3 – Short position with profit (Day trading)

Currency Pair:   EURUSD               (EUR is the Base currency and USD is the Quote currency)

Bid/Ask Price:    1.11501/1.11508   (Spread = 0.00007 or 0.7 pips)

Trader sells 100,000 EURUSD @ 1.11501 (Entry price)

Trade Value = 100,000 * 1.11501 = USD 111,501

Initial Margin @ 5% = USD 5,575

Commission @ 0.40 bps = 111,501 * 0.00004 = USD 4.46

Later in the day Bid/Ask Price:    1.11445/1.11452 (Spread = 0.0007 or 0.7 pips)

Trader decides to close out position to take profit. He/she buys 100,000 EURUSD @ 1.11452 (Exit price)

Trade Value = 100,000 * 1.11452 = USD 111,452

Commission @ 0.40 bps = USD 4.46

Gross Profit = Quantity * (Exit price – Entry price) = -100,000 * (1.11452 - 1.11501) = USD 49

Net Profit = Gross Profit - Commission = USD 49 - USD 8.92 = USD 40.08