FOREX CHANNEL > What is the forex margin trading?
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What is the forex margin trading?

forex margin trading
The trading unit of foreign currencies is defined as 10,000 in US dollar or 100,000 US dollar. Assuming one US dollar is worth to 120 Japanese Yen, 10,000 USD should be equal to 1.2 million JPY, and 100,000 USD to 12 million JPY. This merit is to enjoy the bigger trade than you actually have with using margin account, so there seems to be many chances to make bigger money on revaluation gains. On the other hand, the demerit exists that you would lose bigger money than you expect.

Unlike the foreign currency deposit, the forex margin trading is a very speculative financial product. It is necessary to understand the nature of risks where to expose, and to trade forex using your own capacity with self-responsibility. It is not suitable to trade forex using the indispensable capital for your life, i.e., the retirement fund or pension.

Charm point of forex margin trading

To tell the truth, there is no other investment entities than the forex margin trading from an efficiency viewpoint. The higher leverage and the cheaper commission fees should be very attractive to the individual investors. Some brokers are preparing for the automatic loss cut system for the sake of customers' safety to avoid unexpected loss expansion any more.

This web site is aiming that you should all understand some basic structures and the risks on the forex margin trading. Although some difficult specifications which to be unfamiliar to you, like leverage effect, swap spread and the width to the cost, commission fees or so, you can go ahead to read any section in which you got interested. Please inquire yourself to the forex brokers where you want to start about the margin account because the details of handling the margin account are somehow different from each other. Here, let me allow to explain a rough mechanism of the margin account.

 
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