The probability of a positive outcome of the trade is 50%.
The average profit of the trade is +5%.
Average loss of a trade — -5%
Commission for entry and exit — 0.2%
Leverage = 5×
Without leverage:
ME = 0.5 × 5% + 0.5 × (-5%) = 0% (excluding commission)
With 5× leverage:
Profit = +25%
Loss = -25%
Commission with leverage ≈ 1%
ME = 0.5 × 25% + 0.5 × (-25%) - 1% = -1%
Even with equal odds, the result is negative due to commissions and leverage.
Advantages of spot trading 💎
No risk of position liquidation.
Less impact of commissions.
