Basic of Forex Trading

21

FEB,2018

Basic of Forex Trading

We are going to discuss three key elements to forex trading such as Leverage, Margin, and Equity.

Leverage,

In finance, leverage (sometimes referred to as gearing in the United Kingdom and Australia) is any technique involving the use of borrowed funds in the purchase of an asset, with the expectation that the after tax income from the asset and asset price appreciation will exceed the borrowing cost.

Margin

Trader life Main part is Trading Margin. If a trader does not have enough margin, then he cannot open a trade. Furthermore, if a trader has an open position moving against him, he may eventually not have enough money to act as margin, which means his account would suffer a "margin call."

Equity

Everyone knows that one of the leading causes of business failure is a lack of initial capital, and trading is no different. If a trader opens an account with a few thousand bucks and trades heavily leveraged positions, his chances of success are nominal.