looking to open a new account, page-18

Martin Gifford,

The methodology you used in 5 is correct.

Of course, instead of a 20.5 % profit, it could have been a 20.5% loss if the trade has gone against you.

Also, very important to bear in mind that, in your example, you held the trade for 5 days, BHP price would have fluctuated up and down in that 5 days period, you would need to have enough equity in your account to absorb the down (if you are Long) or up (if your are Short) until you close the trade to avoid the trade being closed by your provider due to insufficient funds.

There is also the question of Stop Loss, if you use it, how far or tight do you set it. Setting Stop Loss too tight, you have the potential of it being triggered and your trade closed, setting it wide will require bigger fund available to cushion the effects of the price fluctuation during the period of your hold, especially if you intend to hold a trade for some days.

There are quite a few matters to be taken into consideration when you take up a position.

Just my views.