What Is a Worked Example of a Standard Account in Forex? (With Assumptions)

Direct answer

A worked example of a Standard Account is a step-by-step numerical scenario that explains how account mechanics (like the instrument’s contract size and how you compute profit/loss from price movement) translate into money changes, assuming a set of clearly stated inputs.

Because provider details differ, a worked example does not prove future outcomes. It is mainly a transparent way to understand what to measure and how to calculate using your own assumptions.

Mechanism or definition

A Standard Account is a type of forex trading account offered by a provider. In many common descriptions, “standard” is associated with typical lot sizing (for example, contract size conventions) and a mix of costs that may include spreads and/or commissions, depending on the provider and the instrument.

A worked example usually needs these inputs:

Trade size: typically expressed in lots; the lot size maps to a contract size in base currency terms.
Entry and exit prices: the prices used to compute the price difference.
Position direction: whether you buy or sell (affects the sign of profit/loss).
Cost assumptions: spread/commission treatment and when costs are applied.
Timing and execution: whether you assume perfect execution or allow slippage.

To keep the example self-contained, the calculations below use simplified, generic mechanics. They avoid claiming any specific provider’s terms.

Evidence or example

Scenario (assumptions stated)

Assume:

The instrument is quoted so that profit/loss depends on the price change.
The account uses a fixed contract size per “standard lot”; for illustration, assume 1 standard lot = 100,000 units of the base currency.
You open 1 standard lot.
You buy.
Entry price = 1.1000.
Exit price = 1.1050.
Ignore commissions for this illustration (assume commission = 0).
Ignore financing/rollover (assume no overnight costs).
Ignore slippage and assume you get exactly the entry and exit prices.
We focus only on the basic price-move component.

Step-by-step price-move calculation

Price change = 1.1050 − 1.1000 = 0.0050.
For a simplified “pip-style” view, suppose that the quoted move corresponds linearly to P/L in your account currency through the contract size. Using a common educational simplification, treat the P/L magnitude as proportional to:
- contract units × price change.

So the notional P/L (ignoring currency conversion complications) is:

P/L ≈ 100,000 × 0.0050 = 500 (in “quote-currency per unit” simplified terms).

Incorporating one cost component (spread as a simplified reduction)

Now add one more assumption to reflect a realistic limitation: a spread that effectively worsens your entry.

Assume the buy entry is at the ask and the “mid” is what you mentally track.
Let the spread be 0.0002 (this is an assumption for the example only).
If your “entry expectation” was based on mid=1.1000, then the actual paid price might be 1.1001.

Update entry:

Actual entry = 1.1000 + 0.0001 = 1.1001 (half-spread assumption).
New price change = 1.1050 − 1.1001 = 0.0049.
New P/L ≈ 100,000 × 0.0049 = 490.

Interpretation: under these assumptions, the spread reduces the basic P/L from 500 to 490. The exact numbers in real accounts depend on how the provider converts quote changes into your account currency and how spread is applied.

Limitations and risks

1) Variable execution and trading costs

The example assumed perfect execution at exact prices. In reality:

Slippage can change entry/exit prices.
Spread can widen during volatility.
Commission (if applicable) may be charged per trade.

Any of these can make the realized P/L differ from the worked math.

2) Provider-specific contract details

Even when an account is called “standard,” providers may define lot sizes, contract specifications, and cost components differently. If your provider’s contract size or conversion differs, the same numeric inputs can produce different outcomes.

3) Other costs not included in the example

Many accounts can include financing/rollover for positions held overnight. The worked example explicitly assumed no overnight costs. If financing applies, results will differ.

4) Jurisdiction and account terms matter

Tax treatment, account rules, and risk controls (such as margin call mechanics) vary by location and provider. A worked example focused on price movement cannot replace reading the actual account terms.