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Thread: What is margin trading and leverage?

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    Moderator cool user Resolve's Avatar
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    Lightbulb What is margin trading and leverage?

    What is margin trading and leverage? Margin trading in Forex. Leverage in Forex.



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    This topic is being updated for further discussions...

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    Trading on margin is used to increase an investor's buying power. ... Simply put, margin is the amount of money required to open a position, while leverage is the multiple of exposure to account equity.

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    Quote Originally Posted by colby65 View Post
    Trading on margin is used to increase an investor's buying power. ... Simply put, margin is the amount of money required to open a position, while leverage is the multiple of exposure to account equity.
    We will have to understand that while it is correct to make use of margin in our trading which is usually in the form of leverage but we will have to also learn how to manage them correctly.

    Because if you are using a high leverage trading account then the risk of a loss will increase and it would not be advisable to do so.

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    Thanks for sharing this video! It's actually pretty helpful since I'm always getting confused about different terms in trading.

    As I get it, in forex trading, the margin trade refers to the increase of risks, but it also means higher potential revenue. Margin size usually varies and depends on a broker. Also, the amount of margin is generally shown as a percentage that a broker gets. Besides, I'm not sure if either it's true or not, but as far as I know, margin trading and leverage are pretty much the same things. Since they refer to the same stuff. But I might be wrong with this.
    Last edited by Ace864; 07-23-2021 at 08:25 AM.

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