Understanding the Forex CFD Calculator and Martingale Strategy
What is Forex CFD?
Forex CFD (Contract for Difference) trading lets you speculate on currency pair price movements, such as XAUUSD (Gold/US Dollar), without owning the asset. You gain or lose based on the price difference between opening and closing a trade.
What is the Forex CFD Calculator Used For?
This calculator assists traders using the Martingale strategy by calculating floating losses, margin needs, and trade details. It shows trade steps, lot sizes, and risks based on your inputs.
What is the Martingale Strategy?
The Martingale strategy is a trading approach where you increase your trade size after a loss to recover previous losses and profit when the market reverses. In this calculator, each new trade’s lot size is multiplied (e.g., by 1.21) after a set price movement (e.g., 5 pips), aiming to break even or profit when the price moves favorably. However, it carries high risk as losses can grow quickly.
Explanation of Calculator Terms
- Forex CFD Pair: The asset or currency pair traded, like XAUUSD (Gold vs. US Dollar).
- Current Price: The market price of the CFD pair now (e.g., $3307.16).
- Starting Price: The price at which the first trade opens (e.g., $3289.24).
- Breakeven Price: The price where all trades together result in zero profit or loss (e.g., $3286.50).
- Difference to Current Price: The gap between the current and starting price (e.g., $7.26).
- Account Balance: Total funds in your trading account (e.g., $1000).
- Buy/Sell: Trade direction—buy (price expected to rise) or sell (price expected to fall).
- Price Distance Between Trades (Pips): Price movement in pips before a new trade opens (e.g., 5 pips).
- Lot Size Multiplier (Martingale): Factor increasing lot size per trade in the Martingale strategy (e.g., 1.21).
- Initial Lot Size: Size of the first trade (e.g., 0.01 lots).
- Account Leverage: Ratio of borrowed funds to your capital (e.g., 500:1).
- Margin Used: Funds used to open trades (e.g., $14.53).
- Free Margin: Funds available for new trades (e.g., $969.42).
- Margin Level: Equity-to-margin ratio, in percentage (e.g., 6773.56%).
- Total Trades: Number of open trades (e.g., 2).
- Total Lot Size: Sum of all trade sizes (e.g., 0.02).
- Total Floating Loss: Unrealized loss from open trades (e.g., -$16.05).
- Transaction Table: Details of each trade step—entry price, lot size, margin, and floating loss.
- Scenario - Starting Forex CFD Price: Initial price for simulation (e.g., $3289.24).
- Scenario - Current Forex CFD Price: Price for calculating scenario results (e.g., $3279.24).
- Price Difference: Change between starting and current scenario prices (e.g., 10.00 $/oz).