What is margin trading in forex?
An explanation of margin trading from the School of Pipsology. Hope this helps!
Learn how margin trading in the forex market works. Understand Margin, Leverage, Balance, Equity, Used and Free Margin, Margin Level, Margin Call, Stop Out.
zianfx
February 3, 2021, 11:36pm
3
You can also check these threads for explanations of margin trading in forex.
I’ll try:
Margin - the deposit of good faith that is held as security by your broker for the position the broker opens for you
Leverage - say 100:1. That means that 1$ of margin will allow you to control a position of 100$
Risk management - cannot be boiled down really. Suffice to say that it may be the most important part in trading. Simple rule could be: don’t ever risk more than x percent of your account in a single trade
Could also be only to enter trades with a high probability of you …
most people learning blow an account (or very nearly) at some point because unlike you, they don’t have the sense to use 1:10 leverage
commonly they use something like 1:200 (some are even insane enough to try 1:500!) thinking to themselves that it must be a reasonable thing to do because “most people” do it
of course, that’s why most people lose
given the overall success rates among people starting out with forex trading, it pays to AVOID doing what “most people do”
when you see things bei…
fxgrad
February 5, 2021, 11:14am
4
When you have low account balance but you want to place bigger trades, margin trading allows you to do so with the help of margin.