The following is an example of trading Forex with Trade Real-Time.

You decide to go long of the euro against the dollar. Our quote is 1.3452/1.3454, and you buy 1 contracts (the equivalent of E100,000) at 1.3454.

The value of your position is E100,000 x 1.3454 = $134,540. To open the position you supply a deposit as low as 1% of the total position. Your deposit is therefore 1% x $134,540 = $1,345

While the position remains open, your account is debited or credited to reflect the effect of the interest rate differential between the euro and the dollar.

Euro interest rates are lower than dollar rates, and you incur interest for holding a long position in the lower-rate currency, so the interest adjustment is debited from your account.

Three weeks later, EUR/USD has risen to 1.3796/1.3798, and you take your profit by selling 1 contract at 1.3796. Your profit on the trade is calculated as follows:

Closing transaction
E100,000 (1 contract) x 1.3796 = $137,960

Opening transaction
E100,000 (1 contract) x 1.3454 = $134,540

Profit on trade $3,420


The trade referenced above would have had a corresponding loss associated with it if the trader had taken short position. Trading on margin magnifies both the profit and loss of any trade.