A couple of questions about Margin

Hi all,

This being my first post I think I should firstly thank and congratulate BabyPips on an awesome website. The information here is great and I’m really enjoying learning here.

I have a couple of questions about margin.

I have a USD demo account at Oanda. I am trading GBP/USD. Their margin requirement is 2%.
If I have a \$1000 usable margin and I buy 10,000 units of GBPUSD at 1.96607, this is \$19660.7 trade value. My margin used is \$654.50. What I cant figure out is how to calculate how many units I need to purchase if I want to use, for example \$300 of my usable margin. Is it correct thing to do? Or is it more common to buy as many units as possible, leaving just the margin requirement (%2) as usable margin. Or is it best to calculate how much of a movement (pips against you) you will be able to sustain at X amount of units, and go from there?

AP

I use Oanda too and depending on the amount of leverage you are setup for will determine how much margin is required. You can change your leverage by choosing “[B]account[/B]”, then “[B]change leverage”[/B]. If you set it to [B]50:1[/B] then it will be 2% margin requirement but that is not the default. I think [B]20:1[/B] is the default. I also change my default unit size under “[B]Tools[/B]”, “[B]User Preferences[/B]”, then “[B]Quotes[/B]”.

For example, if you set your default leverage to [B]50:1[/B] then change your default unit size to [B]10000[/B], then you will only require [B]\$393 (2%)[/B] margin and you will be trading at [B]\$1/pip[/B] [I](according to your example).[/I] Of course you will require more margin if the GBP appreciates against the USD and the quote rises. According to your example it sounds like you are set to [B]30:1[/B] leverage which requires [B]3.3333%[/B] margin or [B]\$655[/B] in your case. See link for leverage & margin requirements at Oanda. Hope this helps and not confuses you more !