Friday, July 19, 2024

Margin

In this article, We learn about “Margin “.Let’s Go!

Margin is the amount of capital required to open a leveraged trading position.

When trading Forex, you only need to invest a small amount of money to open and maintain a new position.

This capital is called Edge.

This is the difference between the full value of your position and the funds lent to you by the broker.

Margin can be considered a good-faith deposit deposit or collateral required to open a position and keep it open.

Margin

In Forex trading, there are two types of margin:

  1. A Deposit or initial margin required to open a position
  2. A Maintenance Margin Required to maintain the position.

Once you open a position, you may need to add more cash if your trades start losing money and your deposit margin is not enough to maintain the position.

If this happens, your broker will issue you a margin call and you will be asked to deposit more cash in your account

This additional capital is called Maintenance Margin.

Are you overwhelmed by these fringe terms? Check out the margin courses in our Margin 101 course that breaks it all down for you, easy and hassle-free.

If you want to learn more foreign exchange trading knowledge, please click: Trading Education.

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