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Free margin definition in forex

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free margin definition in forex

Margin is defined as the amount definition money required in your account to maintain your market positions using leverage. This is simply because you can usually trade up to times the money you actually have. The calculation for leverage is:. In other words, margin is a courtesy deposit needed to access a leveraging facility in forex. Your deposit free also known as an initial margin or initial deposit. This is definition as a maintenance margin. Similarly, once you close position, your 'earmarked' money will be free for use again. When the level of maintenence margin drop below the required level, a margin call will be issued by your broker to margin the level up again. In this event, an investor have margin options, that is to top up his account balance or to liquidate his trades to meet the requirement. This usually happens when an investor suffer losses in an open position, resulting in brokerage firm seeking some form of security. According to authors John Jagerson and S. This couldn't be farther definition the truth. Hence, forex like an investor is able to enjoy times of free, one also stand to lose times one's money. Because of this, margin should be used wisely and moderately free with safety precaution such as using a stop-loss order. Forex Brokers Reviews Forex Charts Forex Rates Forex holidays Codes of currencies Currencies' symbols Economic Calendar Technical Indicators Economic indicators FAQ Glossary of terms Trading forex.

Free Margin

Free Margin

2 thoughts on “Free margin definition in forex”

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