Leverage and Margin

I Have No Money To Buy 100,000 EURO,how?
The answer: LEVERAGE and MARGIN
Illustration:
"Leverage" as we are borrowing money at broker with the company and with a certain amount provide some assurance that the named "Margin"
Types of Leverage
Have some type of leverage in general, namely:
1:1 means that the money margin = contract value (100%)
1:50 means, margin = 2% of the value of the contract
1:100 means, margin = 1% of the value of the contract
1:200 means, margin = 0.50% of the value of the contract
1:400 means, margin = 0.25% of the value of the contract
1:500 means, margin = 0:20% of the value of the contract
Description: Margin = Collateral
Collateral (margin) will be returned to your account balance your portfolio is more intact after the position of your order is closed (close) or clear

Margin Calculation:
Indirect Currency (USD / JPY, USD / CHF, USD / ...) :
Lot 100,000 x % Margin
Example:
Buy 0.3 lot USD / JPY 121.07 in price,
with the leverage 1:200 = 100,000 x 0.3 x 0.5% = USD 150
Direct Currencies (GBP / USD, EUR / USD, ... / USD) :
Lot 100,000 x %Margin x Market Price
Example:
Buy 2.1 lot EUR / USD at 1.3010 price,
with the leverage 1:500 = 100,000 x 2.1 x 0.2% x 1.3010 = USD 546.42
For GENERAL Cross Currency Rate (GBP / JPY, EUR / GBP, and other currencies that are not proportionate with the USD):
Margin Rate for Cross is calculated from the Base Currency
Example: (GBP / JPY) = Base Currency is GBP
Buy 1.5 lot GBP / JPY 242.65 in price,
with 1:500 leverage (eg, at the price of GBP / USD = 2.0360) = 100,000 x 1.5 x 0.2% x 2.0360 = USD 610.8
You will not be able to order the rest of the Free Margin if you are not sufficient.
The illustrations of Leverage & Margin
illustrations (with 1:500 leverage in your account)
You want to buy a $ 100,000 USD / JPY on the market (or = 1regular lot),
You do not need to pay capital of $ 100,000, But you just spent the margin of course that is 0.2%
the margin for $ 100,000 is only $ 200. (1:500 leverage, margin 0.2%)
And when you get profit from the transaction, the results can be the same magnitude as well as with trade $ 100,000 capital directly in the market without any leverage.
And if you loss, you only loss of $ 200 and not $ 100,000. (you can also limit your losses with Stop Loss)
So Modern trade in Forex is more profitable and risk is lower than the traditional type, because of Leverage facilities and Forex Margin in the Modern trading. and the potential results (Gain), which also obtained the same magnitude.
a high Leverage facilities help to increase the resilience point
Calculation of Profit and Loss
For Direct Currencies : (for example: EUR / USD, GBP / USD)
movement pips x lot x $ 10
Example: Buy 1 lot EUR / USD from 1.3000 to 1.3008 = 8 pips
8 pips x 1 x $ 10 = $ 80
For Indirect Currency: ( for example: USD / JPY, USD / CHF)
(open price - the price close) lot x x 100,000 / close price
Example: Sell 0.2 lot USD / JPY from 122.12 to 121.08
((122.12 - 121.08) x 0.2 x 100000) / 121.08 = $ 171.78
For GENERAL Cross Currency Rate : (do not be compared with the USD, for example: GBP / JPY, EUR / GBP)
If Direct Counter Currency = Lot x 10 x movement point (pips)
If inDirect Counter Currency (Lot x 1000 / counter currency price at the time) x movement point (pips)
Example (Indirect): Sell 0.3 lot GBP / JPY from 242.85 to 242.50.
242.85 to 242.50 = 35 pips (and price of USD / JPY was at 119.15)
(0.3 x 1000 / 119.15) x 35 pips = $ 88.12
Example (Direct): Buy 0.2 lot EUR / GBP from 0.6700 to 0.6725.
0.6700 to 0.6725 = 25 pips
0.2 x 10 x 25 pips = $ 50