Finance Tools
What Margin Means
Margin is the part of your balance a broker sets aside to keep a leveraged trade open. It is not a fee, and it is released when you close the position.
Leverage Cuts Both Ways
Higher leverage means less margin per trade, but it also lets you open positions far larger than your balance. Losses are calculated on the full position, not on the margin.
Watch Your Margin Level
Margin level is your equity divided by the margin in use. When it falls to the broker's margin call level you get a warning; at the stop-out level positions start closing automatically.
Know Your Broker's Limits
Maximum leverage depends on the regulator and the entity you sign up with. FxExplorer reviews list each broker's leverage, margin call and stop-out terms.
A Worked Example
Opening 1 lot of EUR/USD at 1.1000 with 1:100 leverage needs about $1,100 of margin on a USD account. At 1:30 the same trade needs about $3,670.
Top Articles
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Trading Forex for Beginners: A Complete Practical Guide
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