A short-term debt obligation backed by the U. This area is read-only access. Closed cases from both the FPA Traders Court and the FPA Scam Investigations Committee. Price Action Forex Trading Course. In the case of financial markets, an index is a hypothetical You can not create a new thread in this folder. In order to break even on a trade, a position must move in the direction of the trade by an amount equal to the spread.




The Forex market comes with its very own set of terms and jargon. This phrase is also sometimes used to refer to currency quotes which do not involve the U. For example, if an exchange rate between the British pound and the Japanese yen was quoted in an American newspaper, this would be considered a cross rate in this context, because neither the pound or the yen is the standard currency of the U. However, if the exchange rate between the pound and the U.

Exchange Rate — The value of one currency expressed in terms of another. Pip — The smallest increment of price movement a currency can margin trading forex definition. Also called point or points. Leverage — Leverage is the ability to gear your account into a position greater than your total account margin. Increasing your leverage magnifies both gains and losses. To calculate the leverage used, divide the total value of your open positions by the total margin balance in your account.

Margin — The deposit required to open or maintain a position. Used margin is that amount which is being used to maintain an open position, whereas free margin is the amount available to open new positions. This allows a trader to leverage his account by up to times or a leverage ratio of Most brokers will automatically close a trade when the margin balance falls below the amount required to keep it open. Spread — The difference between the sell quote and the buy quote or the bid and offer price.

In order to break even on a trade, a position must move in the direction of the trade by an amount equal to the spread. You will need to understand how to properly read a currency pair quote before you start trading them. The reason for this is because in any foreign exchange transaction you are simultaneously buying one currency and selling another. If you were to buy the EURUSD margin trading forex definition the euro strengthened against the dollar, you would then be in a profitable trade.

In other words, in the example above, you have to pay 1. In other words, in the example above, you will receive 1. An easy way to think about it is like this: the BASE currency is the BASIS for the trade. So, whether you buy or sell a currency pair, it is always based upon the first currency in the pair; the base currency. The basic point of Forex trading is to buy a currency pair if you think its base currency will appreciate increase in value relative to the quote currency.

If you think the base currency will depreciate lose value relative to the quote currency you would sell the pair. Bid Price — The bid is the price at which the market or your broker will buy a specific currency pair from you. Thus, at the bid price, a trader margin trading forex definition sell the base currency to their broker. Ask Price — The ask price is the price at which the market or your broker will sell a specific currency pair to you.

Thus, at the ask price you can buy the base currency from your broker. Jump To Next Chapter — Part 3: Long or Short? Part 2: Forex Trading Terminology Part 3: Long or Short? Part 5: What is Fundamental Analysis? Part 6: What is Price Action Trading Analysis? Part 7: Introduction to Forex Charting Part 8: What Is A Forex Trading Strategy? Disclaimer : Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information.

By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Learn To Trade The Market Pty Ltd, it's employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex margin trading forex definition involves substantial risk of loss and is margin trading forex definition suitable for all investors.

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Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Part 2: Forex Trading Terminology. Cross rate — The currency exchange rate between two currencies, both of which are not the official currencies of the country in which the exchange rate quote is given in. The exchange rate of two currencies is quoted in a pair, such as the EURUSD or the USDJPY.

Jump Back To Start — Margin trading forex definition Trading Beginners University. Syllabus Of All Chapters. Part 1: Introduction — What Is Forex Trading? Part 3: Long or Short? Part 4: What is Professional Forex Trading? Part 7: Introduction to Forex Charting. Part 8: What Is A Forex Trading Strategy? Part 9: Common Forex trading mistakes and traps.

Part What is Technical Analysis. Part How to Make a Forex Trading Plan. Part The Psychology of Forex Trading. Part Professional Price Action Forex Trading Strategies. Part 1: What Is Forex Trading? Part What is Technical Analysis? Nial Fuller on Facebook. Nial Fuller on Twitter. Nial Fuller on Linked In. Learn To Trade Forex. Beginners Forex Trading Course. Price Action Forex Trading Course. Price Action Trading Definition. New York Close Forex Charts. Bearish On AUDUSD Whilst Under 0.

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What is the meaning and calculation of Margin Level in Forex trading


Learn the difference between leverage and margin in forex trading, as well as other " margin " terms in forex trader's platforms. When an investor uses a margin account, he or she is essentially borrowing to increase the possible return on investment. Most often, investors use margin accounts. Trade Forex and Gold with ACM Gold - the leaders in Forex Trading in South Africa. Deposit With Ease In Rands! Start Trading Today.