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What is margin trading? Can I trade Big with Less Money in hand?

Discussion in 'General Forex Talk' started by Jack Francisco, May 4, 2012.

  1. Jack Francisco

    Jack Francisco Private

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    what is margin trading....Can I trade Big with Less Money in hand?
     
  2. craigthinks

    craigthinks Private

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    Yes, but with big wins come big losses.
    Yes and you have to trade with margin in forex unless you are trading $100,000 plus accounts So the minium trade on a mirco lot (.01 lot) is $1000 USD for the EURUSD. Without margin you would need $1000 dollars to make the trade. At margin of 100:1 you can trade the minium at say $10 dollars. ( I hope I got my math correct, I still get mixed-up) In USA, the max margin is 50:1, so you need $20 to place the trade for a $1000 (.01 lot). Most forex trading done to move money around the world is done in lots. A lot is $100,000 USD or for some brokers a lot is 1 million.
    In the stock market, margin is barrowing money more than you have. Normally a max of 2x you account size and if the trade goes against you, you get a margin call and they sell your position for a loss. Margin calls happen in forex all the time too.
    With quesiton this basic, you should look for a good forex book. Also, lots of info here and on babypips.
    Just get a demo account with 100 or 50 margin, do some trades and you will see.
     
  3. FringFX

    FringFX Sergeant

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    simply, margin trading involves an entrance fee so you play in the forex market 'playground'

    trading big money with less is possible but you need to be careful with how big you trade, specially in the initial few years.
     

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