Hey everyone. I’m learning the course from babypips on margin calculation needed to open a new position. Babypips says on this part of the course: “https //www babypips com/learn/forex/what-is-margin” (I can’t post links, I’m a new user)
Required Margin = Notional Value x Margin Requirement x Exchange Rate Between Base Currency and Account Currency
is the method for finding the required margin for opening a new position. But I’ve spent my good share of time googling and it turns out that most of them are giving me this formula:
(Contract size * price) / leverage
so if I want to open a position on EUR/USD at 1.07 for 0.02 lots with a leverage of 200, I’d plug in these values for the formula:
2000 * 1.07 / (200) = 10.7. Meaning I’d need $10.7 in opening the position. I’m just confused on why babypips is giving another formula that I see no website teaching. In all honestly, BabyPip’s formula seems to wrong to me, but I might be wrong on that. Can someone correct me on this?