When you are in the foreign exchange market, then you have to be well acquainted with all the technical terms used in trading of forex. In this context, there is a term commonly used, and it is forex margin and forex free margin.

In this post readers will be able to understand both these concepts and hopefully they will use the skills acquired through them successfully while trading forex. The margin in forex trading actually points to an amount of money in trading account of the trader available for the same purpose.

It is also known as Forex margin trading, and it also offers the ability to trade 10 to times the value of deposit made by the trader for currency trading. If now the trader wants to buy 10, Pounds, then he has to sell 15, US Dollars. So, through this example, it is clear that the traders can buy a large amount of currencies through investing a small amount.

Now let us consider another most significant technical term which is forex free margin. Free margin is actually the difference of equity of traders account and open positions margin. These funds will not be regulated as indemnity in trades on financial market.

But the same funds can be utilized for any given operation in which there is an opening of a current position and withdrawal is also there.

Margin | Interactive Brokers

When a trader has no position, no money from the account of trader will be used as margin. So, the money the trader is having in his account is completely free. Let us consider an example in order to understand Forex free margin easily. It is evident that as long as the trader has no position, account equity of the trader and free margin will remain same as his account balance. This website uses cookies to enhance your experience. By continuing to browse the website, you are agreeing to our use of cookies.

Trading on financial markets carries risks. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage.

As a result, CFDs may not be suitable for all investors because you may lose all your invested capital. You should not risk more than you are prepared to lose.

Leverage, Margin, Balance, Equity, Free Margin, Margin Call And Stop Out Level In Forex Trading

Before deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience. Click here for our full Risk Disclosure. All retail clients funds are insured by the Investor Compensation Fund subject of eligibility.

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