Hi Traders

Hope you're enjoying in forex trading ...
I wish to take a word about Marginal trading...also wish to hear your opinion...

Marginal trading is both what makes trading on the foreign exchange market so possibly profitable – and its biggest risk. In a nutshell, trading on the margin is simply trading with borrowed capital. Depending on your dealer, you can purchase $100,000 worth of currency for as little as $500. If your trades are on target, you make a profit on the entire $100,000 lot – minus dealer commission, of course. If, on the other hand, your trade ends up losing you money, you could end up being liable for far more than the $500 you originally invested.

That’s why one of the strongest bits of advice you’ll hear from most experienced forex traders is ‘Keep your eye on the margin’ – or even more strongly, ‘Don’t ever trade on the margin’...


Regards
fxdekac

What do the boxes mean in your post?

My opinion on margin or more specifically leverage is that if you use it properly it is one of the main things that forex has going for it.

If used with proper Money Management it can give you a huge advantage.

For example, i use 100 to 1 leverage which means when i place a trade for every $1 i put towards the position my broker will put in $100 so if i was running 300 to 1 he would put in $300 for every $1 i put in.

So most people use this wrong and get a bigger position and then get into trouble when there trade goes against them because they end up using to much margin and they end up taking a big hit.

Here is an example of how using proper Money Management and using the leverage and your margin to your advantage when you get your entry slightly wrong:


2009.05.29 14:01 sell 0.10 eurusd Price in 1.4094 2009.05.29 14:41 Price out 1.4094 Profit 0.00

I got into this trade in my brothers $11,000 Standard Account at 100 to 1 leverage and it was only earning $1 a pip and was using a very small amount of our margin, i took the position after price had already moved through the R1 & had just gone through the R2 and was on the edge of the daily range but the price kept going up, because i had only taken a small position and still had a large amount of margin left in my account i was able to put in another position:

2009.05.29 14:34 sell 0.20 eurusd Price in 1.4107 2009.05.29 14:42 Price out 1.4090 Profit 42.61

Now as you can see if i had of taken a large position on the first order my hands would of been tied and i would of had to taken a large hit to my account but because i waited to get into the trade after the price had already moved a long way i was able to put in a trade of double the first order and i was able to get back to break even very easily and even finish in profit.

Please this is just an example and i don't want people to just start putting in double orders every time the price moves against them, it can kill your account very quickly, i use it in certain situations that fit my trading plan but it is a great example of how Margin and leverage if used properly can be a great thing for your Account.

GP

Well i would only say that remember it is margin trading expects more than 100 times as your normal investment. You need to ask yourself how much you can afford to lose. Be extremely ht with yourself about this in fact be more than ht so that you are sure to not overextend your budget cost yourself the family home.