I'm confused with spreads deduction help pls :)

[craziel]

First of all hi to everyone, I'm new here...well I was visiting the site from a long time, but I've registered soon
My confusion comes from the spreads ... let me explain: Let's assume we trade EUR/GBP 1.4397/1.4400 ... I buy a lot of 5.000 and my opened position goes automatically
-3.00 (is it normal right?) okay please someone explain me on what price my position will be 0.00 (on 1.4400/03 right?) and finally it will go "green" for making some profit?
I really can't understand it cuz if need a profit of 10 pips I must deduct the 3 pips is this right. Someone who has time I'll really appreciate some detailed explanation

Thanks and regards

And please can someone do the math what is the profit from this trade that I describe () ...because I want to see If I do it right! Thanks again!

[TrendTrader]

First of all hi to everyone, I'm new here...well I was visiting the site from a long time, but I've registered soon
My confusion comes from the spreads ... let me explain: Let's assume we trade EUR/GBP 1.4397/1.4400 ... I buy a lot of 5.000 and my opened position goes automatically
-3.00 (is it normal right?) okay please someone explain me on what price my position will be 0.00 (on 1.4400/03 right?) and finally it will go "green" for making some profit?
I really can't understand it cuz if need a profit of 10 pips I must deduct the 3 pips is this right. Someone who has time I'll really appreciate some detailed explanation

Thanks and regards

And please can someone do the math what is the profit from this trade that I describe () ...because I want to see If I do it right! Thanks again!

Hi craziel,

Regarding the spread, each time you buy or sale, the broker charges you the difference between the ask and the bid. In your case it is 3 pips. The cost is $1 a pip.
What happened is, when you bought it, it automatically showed spread difference. You don't have to deduct anything from your profit. It is all automated. The profit or loss you see it what you get.

Just to clarify it better. in your present case, you bought one mini lot. Let'say you purchased the following lots:

One mini lot, the costs will be $3 based on the data you provided
Two mini lots cost $6
Three mini lots cost $9 etc....

I hope this helps.

My regards,

[craziel]

Thank a lot for that explanation! Now things are more clear
I really want to succeed with the ForEx, but without someone to be a mentor of you is really hard. I'm glad that the community here is very willing to help one other!
Thanks again!

[TrendTrader]

Thank a lot for that explanation! Now things are more clear
I really want to succeed with the ForEx, but without someone to be a mentor of you is really hard. I'm glad that the community here is very willing to help one other!
Thanks again!

No problem, I am getting all the help and advices I need in this forum, and I am still learning.
Mentor, everybody needs a mentor to guide you on what you are doing wrong and right! Mentor can be anybody who understand forex. Someone who will watch if your plan is being executed as planed or not...

Craziel, there are lots of information in this forum, lots of good strategies. After you go throug them all, you will find yourself and what you are fit for. everyone is differet and what works for me won't necessary work for someone else. But at the end, you will creat your own plan you are comfortable with and fits your personality.

my regards,

[craziel]

Thank you TrendTrader you speak very motivational!