Hi there!
I have taken over my forex account after a shady company with an EA and destroyed it so I’m getting a fast track lesson in FT to see what can salvage…
So I closed part of a trade to prepare for an equity gain and my margin went from £325 to £718? Why would margin increase if I didn’t place a new trade?
Thanks and apologies for the daft question…
Maybe it is actually “Free margin”, which some brokers’ platforms show. Free margin is not the margin your open trades are taking up, it is the margin available to use in new trades. Free margin goes up when you close a trade or part of a trade.
It’s definitely Margin because Free Margin is next to it. Doesn’t make any sense… It didn’t happen on the demo account… it seemed to have gone up by the same value as the swap fees from what I can see??
so confused
Did the Free Margin total go up too? Has your account balance actually gone up?
I was closing with a loss so account went down 2% or so. No change in equity
It looks like the swap fee is being added to the margin when a trade is closed. Is this normal?
Not too familiar on the technicalities but I remember seeing that swap fees affect your account balance:
One thing that needs to be understood is that swaps don’t happen when a trade takes place within a day. For instance, if you open and close a position on the same day, no additional interest charges will be charged or added to your account. However, in case you decide to leave the position open for more than a day, the swaps will then become active.
Thanks for sharing the information. Is there any way we can calculate or know how much swap costs are added?
Swap costs are directly proportional to the lot size. So, before you decide upon holding a position, calculate as to how much it’ll cost you to hold a position for a particular period. This way you’ll be prepared to know the time frame of staying in the trade before it becomes unprofitable. As far as the calculator is concerned, a licensed broker (fxview, instaforex, etoro) includes one on the portal.
When margin trading, you receive an interest in long positions and pay that in the short positions. The difference among these two is called carry and the traders usually earn profit through this difference. What you need to understand is that if you open and close a position on the same day, you are not charged or levied any interest.
Actually it’s probably because you closed a hedged trade. Most brokers have low, or zero margin requirements for hedged trades. Accordingly when you unhedge the trade, you go from zero margin to requiring the full margin.
I don’t think you should be wasting so much time focusing on the margin here because as you said, it was an unregulated broker. So plan on making an account with a licensed broker this time around.
This is a bit confusing at first and it seems that your free margin might have gone up.