What is a profit margin?
How to calculate profit margins
Estimating profit margin for trading
What is the difference between a loss and a profit margin?
What is the difference between profit rates and returns?
The Difference between Trading Fees & Trading Expenses
In this section, we will compare cost of trading (COT) for the most popular forex rates for the different currencies, the most profitable forex rates for each currency and a discussion on profit margins.
COT (Change in price) is the cost of trading (COT) for a trader; specifically, it is the profit margin of a trader when operating with the same money in hand and the currency of their choice, for a given stock.
If an investor sells $100 worth of a stock at the market price of 100 per USD for a profit margin of 1% ($30 in USD) and buys at the same price of 100 for a profit margin of 5.5% ($50 in USD), the money in hand equals to $0.05 ($30 + $50) and the currency is USD
COT is the loss of profit margin a trader needs to keep above the cost of selling the forex. This loss margin is the margin of error when trading and therefore increases with the volume of trading.
If you have 100USD in USD money, then a trader should only ever sell the currency, which they hold on account, in a margin of error of 1%. This means that in the event of a major short position, then the trader needs to put the USD in a position that is even larger, than the current short position, to cover the price drop.
When the stock of the currency in question has gone up considerably (10X from the beginning of the month to the present), it is common practice of traders to move as much funds as they can from the stock or USD markets up into the forex market, for a possible profit margin, when the volume increases. This helps them avoid losses in the forex market, by simply closing off short positions, and then buy back the currency when they’ve seen a return in their forex account.
But what happens if the stock price drops? If the currency in question goes down in price, then a trader may need to sell their USD holdings, as they can’t see this profit margin in their USD holdings anymore, which makes a lot more sense after they sell their stocks
swing trading indicators forex, swing trading define, top swing trading software, list of swing trading stocks, what is swing trading stocks