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The forex market uses margins to increase your profits

The forex market uses margins to increase your profits

Forex is a nickname for the foreign exchange, a vast market of trading in which the commodity is money itself. In the forex market, traders are buying and selling foreign currencies -- trading dollars for euros, pounds for yen, and so forth.

Forex is profitable because national currencies fluctuate from day to day based on predictions of the nation’s gross domestic product and other factors. As with the stock market, the idea with the forex is to buy low and sell high: Buy a lot of a particular currency when it’s weak, then sell it when it becomes stronger.

For example, bad financial news in Great Britain means that forex traders will be selling off their British pounds as fast as possible, as the pound is about to become devalued. Once the pound recovers, those traders will sell it for something else, thus turning a profit.

Though we talk of “buying” and “selling” pounds, euros, yen and francs, the transactions performed in the forex are not literal. That is, if you want to buy 100,000 euros, you don’t have to withdraw the equivalent U.S. dollars from your bank account and swap them out for a big stack of euros. Everything is done on paper only, though the resulting profits and losses are real.

Because the transactions are not done physically, there is room in the forex for what are called “margins” or “leverage.” Put simply, this means you don’t have to actually put up the full amount of the position you’re taking. Usually the margin is 1%, meaning that when you put $1,000 into it, you’re actually getting $100,000. Of course, margins multiply your losses as well as your profits, so you have to be careful.

One of the reasons for allowing a 100:1 margin like this is that the major world currencies in the forex market usually fluctuate less than 1% a day. (In the stock market, a typical stock might fluctuate as much as 10% in one day.) With changes that small, your daily loss or gain on an initial investment of $1,000 would be almost imperceptible, usually less than $10 either way. By multiplying it by 100, the gains and losses in the forex market are more pronounced.

With leverage implemented that way, the basic “lot” for buying and selling currencies is usually 100,000 (which of course only costs 1,000). Most firms that handle day-trading on the forex market don’t go any lower than that.
 
a trader can earn a lot by using a very high leverage. however, the trader can lose too.

i think, leverage is one of the important aspects in forex trading.
 
its wrong, that the market movements based purely on market players, I mean we as a trader and the role that big boys so you can not say that it is only done by a margin of only, there many of news impact as well,
 
its wrong, that the market movements based purely on market players, I mean we as a trader and the role that big boys so you can not say that it is only done by a margin of only, there many of news impact as well,
Can you specify what your trying to say. I read your post and its seems I don't understand what you really want to say in here. I don't know what do you mean is wrong. So if its wrong what is right?
Also about about this big boys and margin of only?
 
I think its true that forex market uses margin and this is the very first thing which the trader need to note before he can take further action to trade in the forex market the margin is what eneable the traders make some reasonable trade.
 
Yes margin is a benefit for trader he can use it as much he wants . Some chances of profitable trades can be avail effectively with high leverage. As low margin we use risk is low . High margin gives high return as well as high loss if we are not good in managing trades and analysis making.
 
Most of us needs leverage to earn expected amount of money. We are retail traders, so some hundreds or thousands dollar is really much for us but not Forex investing. With only such money, we can only earn one cent per pip or even nothing (under 1000$ investment) without leverage. So leverage is necessary for retail traders to gain acceptable profit.
 
At the use of magrin. The risk is been increased also. So therfore margins shouldnt be tempared with unles we are having the knowledge of making use of it. I will rather add more money instead of margins because at a little market downward movement money goes aways more faster and in huge amount.
 
leverage just like double-edged sword which can bring many profit possibilities and also high risk opportunities to traders. using it carefully and always calculating our own capital to have strength hold risk ability with trading wisely using low risk level volume of trading may the only way to get stable income and get survive from our trading activity in forex market
 
trading in forex market using margin may increase traders profit earned, but using it too much will make traders trading positions more vulnerable to get early margin call or stop out on account balance, so the must thing that must be prepare is good money management strategy
 
To define the word margin in a the forex trading . The deposit made by the trader is known as a MARGIN. Margins are important in the use of leverage. A broker requires this margin to opened position is maintained and sustained. The amount of margins differs from broker to broker. Margin is a guarantee and guard from a threat of any risk.
Every trader’s margins are composed so a margin deposit is done and used to trade within the overall market margins. Forex brokers always define how much margin they require from a trader that wants to open a position. A forex margin is articulated through percentages, for example, from 1% to 25%. According to that a trader can calculate the maximum leverage that he wants with the trading account. For instance, a 2% margin means a leverage of 50:1 while 0.50% means a leverage of 200:1. I hope i clear what the margin term means.
 
Its can increase our profit but its can also increase our loses. Right now I do maintain and sustain a 1:100 leverage in all of my trading accounts. I do hope that in the long run I can grow my account without any problem. I'm really excited to see myself becoming a successful trader.
 
Its can increase our profit but its can also increase our loses. Right now I do maintain and sustain a 1:100 leverage in all of my trading accounts. I do hope that in the long run I can grow my account without any problem. I'm really excited to see myself becoming a successful trader.

Thats cool, provided that your capital meets up with the leverage that you are using. Well, margin most of the time have result to lose rather than winning because its not meant to be over used. Well, the using of leverage requires more knowledge in the sense that it should be used when the market has the probabilities of going higher.
 
I think using the margin saves you from trading with more capital and facing a huge loss. It happens when we use high leverage. So it is always advised to thin twice before using high leverage.
 
Yes, it is margin that makes the trader to be able to trade in the forex market with small capital and it will look like he or she is trading with big capital. Margin is the reason why the traders don't need to spend big money before they will make big profit.
 
Simply use high margin in trading if traders want to get big profit in trading. However, such option risky since per pips loss create high reduction of money amount. If traders have small capital only, risky if they are force to trade with big margin. So, better traders prepared with high capital if want to get big profit but capital can accept many pips losses still.
 
Leverage simply like twofold edged sword which can bring many benefit potential outcomes and furthermore high hazard chances to traders. utilizing it deliberately and continually figuring our own cash-flow to have quality hold chance capacity with trading carefully utilizing generally safe level volume of trading may the best way to get steady pay and get make due from our trading movement in forex market.



That's why we need to be careful when use it. If you use leverage to your advantage, there’s plenty of opportunity to make substantial profits, but you need to make wise trading decisions and ensure that you manage your risk effectively. Higher leverage mean higher risk. With FXB Trading, i use 1:500 for trading
 
I think using the margin saves you from trading with more capital and facing a huge loss. It happens when we use high leverage. So it is always advised to thin twice before using high leverage.


Unfortunately, most of the traders don’t know how to use high trading leverage! I think high trading leverage is a good opportunity for the retail Forex traders if they have enough trading knowledge on the Forex market!
 
One benefit forex online trading right now, with leverage we can using small capital but having same oportunity like as using actual contract size, because high leverage will decreasing margin requirement to open one lot size, but this is also harmful if trader always greedy on trading

Yes, I think using trading leverage is a very useful way for the retail Forex traders! But, I am not inspiring them to trade based on high trading leverage only without any plan! By the way, I am trading with 1:100 trading leverage.
 
When a forex trader is planning for future he can’t simply deny his trading and pecuniary capacities. A person who has only 10K money to make investment can’t simply think that he will earn millions dollar within few days and such thinking is not realistic. Thereby every trader should provide great importance on the effective usage of trading methods which will allow him to work according to his pocket and expertise.
 
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