How do margin trading in the forex markets work?


When investors use margin accounts, basically he borrowed to increase the likelihood of return of investments made. Often, investors use margins when they want to invest in stocks with borrowed money using leverage to control the position greater than the amount of money that they are in other words is by controlling their own capital invested. Such accounts are operated by brokers and investors settled daily in cash. But the margin account is not limited to stocks - they are also used by currency traders in the forex market.
Investors who are interested in trading in the forex market first register through regular brokers or online forex brokers. Once investors find the right broker, the margin must be set. Margin Forex is similar to the margin equity - investors took short-term loan from the broker. The loan is equal to the value of leverage taken investors.
Before investors start trading, it must first deposit into a margin account with them.The amount to be saved depends on the percentage margin agreed between investors and brokers. For an account to trade currencies 100,000 units or more, the percentage margin is usually 1% or 2%. So, for investors who want to trade $ 100,000 with a margin of 1% means that the investor must deposit at least $ 1,000 into the account. The remaining 99% is provided by the broker. No interest is paid directly to the amount borrowed, but if the investor does not close his position before the delivery date, then interest charges will apply depending on investor's position (long or short) and short-term interest rates of the underlying currency.
In a margin account, the broker uses $ 1,000 as collateral. If the investor's position deteriorated and his losses approaching $ 1,000, the broker can make a margin call. When this happens, the broker will usually instruct the investor to deposit more money back to defend his position or close a position to limit risk to both parties....

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