Category: Uncategorized
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What is Required Margin?
When margin is expressed as a specific amount of your account’s currency, this amount is known as the Required Margin. EACH position you open will have its own Required Margin amount that will need to be “locked up”. Required Margin is also known as Deposit Margin, Entry Margin, or Initial Margin. Let’s look at a typical EUR/USD (euro against U.S. dollar) trade.…
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What is Margin Requirement?
Margin is expressed as a percentage (%) of the “full position size”, also known as the “Notional Value” of the position you wish to open. Depending on the currency pair and forex broker, the amount of margin required to open a position VARIES. You may see margin requirements such as 0.25%, 0.5%, 1%, 2%, 5%, 10% or higher. This percentage (%)…
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What is Margin?
When trading forex, you are only required to put up a small amount of capital to open and maintain a new position. This capital is known as the margin. For example, if you want to buy $100,000 worth of USD/JPY, you don’t need to put up the full amount, you only need to put up a portion, like $3,000.…
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What is Unrealized P/L and Floating P/L?
In your trading platform, you will see something that says “Unrealized P/L” or “Floating P/L” with green or red numbers beside them. In this lesson, we explain what Unrealized P/L and Floating P/L are. When trading, there are actually two different types of “profit or loss”, also known as “P/L”. Both are important. Let’s discuss the difference between the…
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What is Account Balance?
What does “Account Balance” mean? In order to start trading forex, you need to open an account with a retail forex broker or CFD provider. Once your account is approved, then you can transfer funds into the account. This new account should only be funded with “risk capital”, which is cash you can afford to lose. The “Account…
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What is Margin Trading?
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. Like Bob. Bob sure knows his fried chicken and mashed potatoes but absolutely has no clue about margin and leverage. Margin trading gives you the ability…
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Why Trade Forex: Forex vs. Futures
It’s not just the stock market. The forex market also boasts of a bunch of advantages over the futures market, similar to its advantages over stocks. But wait, there’s more… So much more! In the forex market, $6.6 trillion is traded daily, making it the largest and most liquid market in the world. This market…
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Analysts and brokerage firms are less likely to influence the market
Have you watched TV lately? Heard about a certain Internet stock and an analyst of a prestigious brokerage firm accused of keeping its recommendations, such as “buy,” when the stock was rapidly declining?It is the nature of these relationships. No matter what the government does to step in and discourage this type of activity, we…
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Why Trade Forex: Forex vs. Stocks
There are approximately 2,800+ stocks listed on the New York Stock exchange. Another 3,300+ are listed on the NASDAQ. Which one will you trade? Got the time to stay on top of so many companies?With forex, there are dozens of currencies traded, but the majority of market players trade the seven major pairs. Aren’t seven major…
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Why Trade Forex: Advantages Of Forex Trading
There are many benefits and advantages of trading forex. Here are just a few reasons why so many people are choosing this market: No commissions No clearing fees, no exchange fees, no government fees, no brokerage fees. Most retail forex brokers are compensated for their services through something called the “spread“. No fixed lot size In…