What is Margin Trading?

Telegram FX Signals – The biggest appeal that forex trading offers is the ability to trade on margin.

But for many forex traders, “margin” is a foreign concept and one that is often misunderstood.

Margin trading gives you the ability to enter into positions larger than your account balance.

With a little bit of cash, you can open a much bigger trade in the forex market.

And then with just a small change in price moving in your favor, you have the possibility of ending up with massively huge profits.

But for most new traders, because they usually don’t know what they’re doing, that’s not what usually happens.

More likely, price does move, but it moves against them.

He was sure that this trade was going to be a winner so he bet BIG.

All of a sudden, to Bob’s surprise (and shock), he witnessed his trade being automatically closed on his trading platform and ended up suffering an epic loss.

The funds that now remain in Bob’s account aren’t even enough to open another trade.

What is Margin Trading?

He contacts his forex broker and is told that he had been “sent a Margin Call and experienced a Stop Out“.

Bob doesn’t know what the broker is talking about.

How Does Forex Trading Work?

This is why understanding how margin works is essential.

A lot of new traders do not understand the concept of margin, how it’s used, how to calculate it, and the significance that it plays in their trading.

Do you know what margin actually is? What about used margin?

What is free margin? What is margin level? What is a margin call? What is a stop out or margin closeout?

As you can see, there is A LOT of “margin jargon” used in forex trading.

Before you choose a forex broker and begin trading with margin, it’s important to understand what all this margin jargon means.

Foreign Exchange Forex FX

Terrible things will happen to your trading account like a margin call or a stop out. But you won’t even know what just happened or even why it happened.

If you really want to understand how margin is used in forex trading, you need to know how your margin trading account really works.

This starts with understanding what the heck some (really important) numbers you see on your trading platform really mean.

We’ll call these numbers your margin account’s “metrics”.

What is Margin Trading?

FX Margin Trading

Do you know what margin actually is? What about used margin?

What is free margin? What is margin level? What is a margin call? What is a stop out or margin closeout?

As you can see, there is A LOT of “margin jargon” used in forex trading.

The Risks of Forex Trading

Before you choose a forex broker and begin trading with margin, it’s important to understand what all this margin jargon means.

If you don’t, it’s almost guaranteed that you will end up like Bob.

Terrible things will happen to your trading account like a margin call or a stop out. But you won’t even know what just happened or even why it happened.

This starts with understanding what the heck some (really important) numbers you see on your trading platform really mean.

We’ll call these numbers your margin account’s “metrics”.

What is Margin Trading?

FX Signals

EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD, Gold, Oil and many many more… Forex Trading comes with it high risk. We help by referring only the very best forex brokers available in the marketplace. Your in safe hands with our partners.With our free forex learning guides you will be able to educate yourselves with the most up to date forex basics required in order to enter the Capital Markets. FxPremiere.com Learning centre is now available for all to read. With blog posts written monthly on the most common searched terms.