Imagine that there is a dealer has a commodity to transfer alarm hours imported from abroad at a cost of $ 10 per hour, it is no doubt must be sold at a higher price of $ 10 to achieve a profit .. but how many will achieve a profit?
This depends on the profit margin of any difference between the sale price and the purchase price.
If you decided to sell one-time price of $ 15 per hour and had 1000 hours, will receive a profit of $ 5,000.
But what if he decided or been forced to sell watches a simple profit margin of no more than $ ¼?
Will profit on the 1000 hour = $ 250 only, because the profit margin is too narrow.
If he wants to get a larger profit this narrow margin, he should sell larger quantities of watches.
If sold 10,000 hours at a profit ¼ time will profit = $ 2,500, a good profit got it to sell a large amount of hours to compensate for tight profit margins.
As well as the currency too ..
The prices have changed parts of the ground most of the time, if I bought a small amount of currency and sold it at a higher price segments from the ground no doubt that you will not get on the profit for the glory.
In order to be able to get a good profit in this minor changes to the currency, they must buy and sell large amounts of currency.
To calculate it together to see the difference:
Flanry how the euro will win the high one point when we buy 1000 euros.
When we buy 1,000 euros against which we will pay 985 $, any Snepa 985 $.
Now you have a 1000 euros.
We will sell what we have of the euro, we will sell the 1000 euros and will get an interview on 985.1 $ at the new price.
Profit = Price - price
= 985.1 - 985 = 1 or 10 cents
Any profit resulting from the sale of 1,000 euros at the height of one point is 10 cents.
If we assume we sold the euro at a height of 50 points will be won $ 5. (50 points * .10 for Nqthaluahdh).
It is a simple profit not worth it ..!!
But what if we bought 100,000 euros instead of 1,000 euros on the same previous price?
Will buy 100,000 euros and against which we will pay 98500 $ on the first price.
Us now 100,000 euros.
When we sell the euro after the price rises one point we will get 98510 $.
Profit = Price - price
= 98510 - 98500 = $ 10
Any profit resulting from the sale of 100,000 euros at the height of one point is $ 10.
If we assume we sold the euro at a height of 50 points will be won $ 500 (50 points * $ 10 per point).
A good profit .. Is not it?
So you see that when you buy or sell large amounts of currency can achieve a good profit, but if traded in small amounts of currency will not get a worthwhile profit.
And also considers the former examples You Buying the 1000 Euros got 10 cents for every point.
You Buying the 100,000 euros got $ 10 for each point.
One who determines the value of the point is the size of the amount you buy or sell any currency value croaker, or the size of the contract.
Therefore, less size for trading the currency market is 100,000 of the base currency or close to that amount by the company you are dealing with, because large amounts of currency is the good earnings less unchanged currency prices.
So it is very essential to know the value of the point on the each Sttajer currency with a company that will deal with it.
Will not need to ask, the first things that will tell you the brokerage company before dealing with them is the point value of each currency although not telling you must be sure of yourself.
As mentioned, the point value calculated by contract size of any by the amount of the amount you buy or sell the currency and whenever this sum is greater whenever the value of the point more as noted in the examples of former when we bought a small amount € 1000 and when we bought a large amount 100,000 euros.
Because the size of the contract varies from one company to another, the point values on each currency varies from company to company.
Despite these differences we have said that the size of the contract for the majority of brokerage firms is now 100,000 of the base currency, Fbmthel this size What will be the value of the point?
Answer: You will be the point value on each lot as follows:
One point worth of euros = $ 10.
Point value per pound = $ 10.
One point worth JPY = approximately $ 8.
One point worth of the Swiss franc = $ 6 approx.
Although these values vary from company to company but it is true for most companies.
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