What are the Forex Margin Requirements?
Thanks for the information given above; the concept of forex margin you have given above is really very much beneficial for the traders and especially for the starters so now they can inv4st in forex with full knowledge of forex margin.
Forex trading allows you to trade on margin. This means you only need to put up a small amount of money – known as margin – in order to control a large amount of currency. Margin is not a down-payment but a goodwill performance bond. If your analysis is incorrect and money needs to be taken from your account, the margin in your account is used for this purpose. Typically, $1000 in margin is sufficient to control $100,000 of currency. If you open an account with $10,000, then you can control $1 Million of currency! As an example, you believe the British Pound is about to rise strongly against the US Dollar. You have $10,000 in your account, enough to control $1 million US Dollars. You buy the equivalent of US$1 Million of British Pounds at the bid-price of 1.6500. Three months later, the Pound has soared against the Dollar and the ask is at 1.85.
