Margin Trading 101: Understand How Your Margin Account Works

A beginner's guide on how margin trading works. If you skip these lessons, you will quickly obliterate your trading account. Guaranteed.

  1. What is Margin Trading?
    Learn how margin trading in the forex market works. Understand all the margin jargon used in your trading account.
  2. What is Account Balance?
    What is your account balance or “Balance”? What causes your account balance to change?
  3. What is Unrealized P/L and Floating P/L?
    What is unrealized P/L? What is floating P/L? How do they affect your account balance?
  4. What is Margin?
    What is Margin? What is Required Margin? What is Margin Requirement? Don’t get it twisted. All this margin jargon is explained here.
  5. What is Used Margin?
    What is Used Margin? Learn what Used Margin is, how it’s different from Required Margin, and how it’s calculated.
  6. What is Equity?
    What is account equity or simply “Equity’? Why is it important to always monitor this?
  7. What is Free Margin?
    What is Free Margin? What causes it to change? How do you calculate it?
  8. What is Margin Level?
    What is the Margin Level? If the Margin Level in your account drops below a certain percentage, you can lose a ton of money. Find out why.
  9. What is a Margin Call Level?
    What is a Margin Call Level? Learn the difference between a Margin Call Level and a Margin Call.
  10. What is a Stop Out Level?
    What is a Stop Out Level? How is it different from a Margin Call Level?
  11. Trading Scenario: Margin Call Level at 100% and No Separate Stop Out Level
    A margin trading scenario that involves a losing trade using a broker with a Margin Call Level at 100% and no separate Stop Out Level.
  12. Trading Scenario: Margin Call Level at 100% and Stop Out Level at 50%
    A margin trading scenario that involves a losing trade using a broker with a Margin Call Level at 100% and a Stop Out Level at 50%.
  13. Trading Scenario: What Happens If You Trade With Just $100?
    What happens if you open a margin trading account and trade forex with just $100?
  14. Warning: Different Forex Brokers Have Different Margin Call and Stop Out Levels
    Each broker or CFD provider sets their own Margin Call Level and Stop Out Level. It’s crucial to know what your broker’s Margin Call and Stop Out Levels are!
  15. The Relationship Between Margin and Leverage
    What is the relationship between margin and leverage? The two concepts are related but different. Know the difference.
  16. Margin Jargon Cheat Sheet
    A cheat sheet that summarizes all the margin jargon that all traders should be familiar with.
  17. How to Avoid a Margin Call
    Here are five ways to avoid a margin call whten trading forex.





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