How to Calculate Margin Requirements for Forex Trading?

Answer 1

Margin is a term used in forex trading to refer to the amount of money that a trader needs to deposit with their broker in order to open a position. Margin is not a cost, but rather a security deposit that the broker holds in case the trader's position loses money.

The amount of margin required for a forex trade is determined by the size of the trade and the leverage offered by the broker. Leverage is a ratio that indicates how much exposure a trader can get with a small amount of capital. For example, if a broker offers 100:1 leverage, then a trader can control $100,000 worth of currency with just $1,000 in margin.