In this lesson (Margin Jargon Cheat Sheet - BabyPips.com), at “Required Margin (Per Position)” it says: “For example, if you open a $10,000 (mini lot) position, with a Required Margin of 2% …”
Question:
Instead of “Required Margin”, it should be “Margin Requirement” ?
Looking at all your recent posts you seem to be struggling with the maths around margin. My suggestion is to complete the School of Pipsology module you’re doing and then go and find some other material to study this topic, such as YouTube etc. Then go back and retake the module again and you’ll be surprised about how much you’ve learnt know.
Hey dude, I would tell you that online margin calculators can simplify the process for you. They allow you to input the currency pair, position size, and leverage to quickly determine the required margin.
Hmmm. I kinda think it should also be Margin Requirement. Cause my understanding is that margin requirement is expressed in percentage, while the required margin is the corresponding amount. Although technically, they’re referring to the same thing.
The Margin Requirement or Required Margin is the amount of money that a trader needs to have in their account in order to open and maintain a position in the forex market. It is essentially a form of collateral or deposit required by the broker to cover the risk of the trade.
In the forex market, trading is often done on leverage, which means you can control a large position with a small amount of money. The margin requirement is usually a small percentage of the total trade size, and the specific amount will depend on the leverage provided by your broker.
For example, if you’re trading with a leverage of 100:1, the margin requirement would be 1% of the total trade size. If you wanted to open a trade worth $100,000, you would need $1,000 (1% of $100,000) in your account as a margin requirement.
Remember that trading on margin can amplify both your profits and losses. It’s crucial to have a solid understanding of how margin trading works and the risks involved before you start trading on margin.