What is the relationship between margin and leverage? Margin is forex difference between margin and leverage good faith deposit required to keep a trade open.
Leverage is a byproduct of margin and allows an individual to control larger trade sizes. 10K on Trading Station and 0. Now, when you set up an account with FXCM, FXCM will state your maximum Leverage. For most FXCM Markets clients that is 400:1.
In this example, you can see having leverage of 400:1 means your margin requirement will be 0. Please note: if your account is not the same currency as the first currency in the pair, you will need to use the exchange rate to determine the trade value. This trade would be the equivalent to controlling 10,000 EUR’s, assuming this trader has a USD account. Since the trade is in terms of EUR’s, we need to convert the value of the EUR to USD to determine the value of the trade.
FXCM uses fixed margins, meaning we use a fixed exchange rate for margin value determinations. 16,000 USD for a trader with a USD account. With a leverage profile of 400:1, that means your margin is 0. Please note: leverage can be a double edge sword.
Yes, it can assist a trader in opening a larger trade size than that of their account, but thus amplify gains and losses. Risk Warning: Our service includes products that are traded on margin and carry a risk of losses in excess of your deposited funds. The products may not be suitable for all investors. Please ensure that you fully understand the risks involved. Please click here to read full risk warning. FXCM Markets is not subject to the regulatory oversight that governs other FXCM entities, which includes but is not limited to Financial Conduct Authority, and Australia Securities and Investment Commission.