Margin
Jul 30, 2017 at 07:13
390 Visa
4 Replies
Medlem sedan Feb 12, 2016
522 inlägg
Aug 02, 2017 at 07:57
The required margin for opening a positions is affected by the price. When the price is going up you will need more funds to cover margin requirement and in opposite.
Medlem sedan Feb 22, 2011
4862 inlägg
Aug 02, 2017 at 12:50
Dinard888 posted:
Could someone explain me why a pair can decrease or increase margin? how is it calculated ?
It is very easy.
If you are buying some currency e.g. EUR you need to pay the cost in other side of pair.
So when you buy 1 lot EURUSD you are buying 100 000 EUR for 118 000 USD. Clear?
So without any leverage margin requirement to open the position would be 118 000 USD.
Not including the spread, comissions, price movement etc...
With leverage lets say 1:100 you need just 118 000/100 = 1,180 USD to open such position.
I had some topic here where I tried to explain why low leverage is dangerous.
You can read more about it https://www.myfxbook.com/community/experienced-traders/low-leverage-is-dangerous-why/1194634,1
Medlem sedan Feb 22, 2011
4862 inlägg
Aug 02, 2017 at 12:51
You will of course need more balance to cover the spread, commission and price movement
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