How Trading Forex on Margin Works
Friday, January 8th, 2010One of the key benefits of trading forex for retail investors is the ability to trade on margin (also known as ‘leveraging’ or ‘gearing’). Given the potentially significant size of a trader’s position, it is important that forex investors understand how forex trading on margin works.
Should EUR/USD now move up, resulting in a $5,000 profit on that position and $35,000 in usable margin, but AUD/USD fall, resulting in a $35,000 loss, your usable margin would now be zero and each of these open trades will be closed. Trading on margin is explained by Betsy Waters, dbFX Global Director, in a series of forex trading video interviews.