BTC USD 60,381.8 Gold USD 2,431.10
Time now: Jun 1, 12:00 AM

#### DanielDoo

##### Banned
Messages
7
Lets say you are a small trader and you don’t have enough money to buy a car, but you have a good experience in term of car trading to your clients, so When you open an account with an auto-dealership, for example, that allows margin trading, you will lodge in advance a small fixed amount of money that will stay intact until you settle to purchase a car, then your credit will be split up into two sections:
The margin used is the margin that will be deducted in advance. It is a refundable deposit that will be returned to your account after selling the car, whether it is traded at a gain or loss.
Available margin (usable margin): the amount remaining in your account after deducting the used margin, and this amount are the maximum loss you can have after selling the car to your client.
How to calculate the user's Used margin and usable margin?
We do not want to yield too much attention to how to calculate margin used by yourself. Often you do not need to, since the forex broker will adjust automatically.

In the previous example, let’s say that the value of the whole car = 10.000\$ and you have deposited 3000 \$, the auto dealership will tell you that it will deduct \$ 1000 from your account as a user margin for each automobile you buy. If you purchase two cars you will deduct 2000 \$ from your account as a used margin and your credit will remain 1000 \$ as margin available.
Although the company you deal with will eliminate the need to calculate margin used by yourself, but it would be very useful to learn how managing it yourself.
The used margin can be computed utilizing the following recipe:
Margin used = total value of purchase items / multiplication ratio
In the previous example since the value of the whole car = \$ 10.000 and the multiplication rate allowed by the company is 10 times, that is, the company doubled the capital to you 10 times, the margin will be derived by the authority:
Margin Used = Full Item Value / Multiply Ratio
= 10.000 / 10 = \$ 1000
If you think of buying two cars instead of a car, the margin used will be deducted from your account:
Used margin = 20,000 / 10 = \$ 2000
In the international markets, brokerage companies that trade marginally in different types of commodities, for each specific commodity has its own deal. Each type is sold on a fixed unit basis called contract size, which is the lowest unit traded from the commodity.
In the previous example of cars, the size of the contract = one car worth \$ 10.000, that you cannot trade less than a car worth \$ 10.000 and you can trade multiples of this act, such as trading two cars or three and so on.
Of course you are not allowed to trade a car and a half!!
The margin calculation method used is:
Margin Used = Number of Contracts * Contract Size / Multiplication Ratio
You will know the size of the contract you are dealing with and the proportion of the multiplication in advance before dealing with, which may vary from company to company.
Let's look at our previous example:
We know that the size of the contract = one car worth \$ 10.000 and the multiplier ratio = 10
And then we recognize that if we want to sell a car, the amount deducted by the car franchise from our account is:
Margin Used = Number of Contracts * Contract Size / Multiplication Ratio
= 1 * 10.000 / 10 = \$ 1000
If we want to buy two cars will be:
Margin Used = Number of Contracts * Contract Size / Multiplication Ratio

= 2 * 10.000 / 10 = \$ 2000
Therefore, you can work out the margin used for any number of cars. If we simulate that you wanted to purchase 3 cars at once, \$ 3000 will be deduced as a security deposit.
If you are dealing with auto dealership makes you a double ratio of 20 times, that this dealership will let you to trade cars worth 20 times the total money you deposit you can estimate how much used margin will be deducted if you want to swap in one automobile:
Margin Used = Number of Contracts * Contract Size / Multiplication Ratio
= 1 * 10.000 / 20 = \$ 500

That means that this dealership will deduct from your account \$ 500 for each car you trade.
How to compute the margin available?
Computed by the following simple equation:
The margin available = Balance - Margin used
Agreeing to the previous model:
You have already deposited \$ 3,000 in your account with the auto dealership you have = \$ 3000
When you settle to purchase an automobile that has deducted \$ 1,000 as a user margin, the margin available you have now is:
The margin available = Balance - Margin used
= 3000 - 1000 = 2000 \$

It is the maximum amount you can lose on a deal.

If you take for granted that you have resolved to buy two cars, \$ 2000 will be taken off as a user margin and your margin will now be:
The margin available = Balance - Margin used
= 3000 - 2000 = \$ 1000
.
It is the maximum amount you can lose on a trade.

Thus,
The Margin Trading System is a scheme that grants you to trade goods worth more than your capital.
This case of trading deals with private companies that multiply your capital multiple times, permitting you to trade a commodity against a minor part of its value as a user's deposit.
These societies do not share the profit or loss. They simply require you to compensate the total value of the item after selling it. Its charge is to execute the sale and purchase orders that you designate at the monetary value you choose.

If you ordered the sale of the commodity at a toll higher than the purchase price will be gone through and will derive the value of the commodity in full and will return you a deposit plus the entire profit as if you already possess the commodity.

If placed to sell the commodity at a price below the purchase price will be implemented and will be deducted from your account to complete the value of the whole commodity.

What is Margin call?

Here we will highlight on the primary types of international change rate governmental system
1. Fixed Exchange Rate System
2. Flexible (Floating) Exchange Rate System

3. Managed Floating Rate System.

Fixed Exchange Rate System:
The fixed exchange rate system refers to a scheme in which the exchange rate for a currency is determined by the regime.
The basic aim of assuming this scheme is to assure stability in foreign trade and capital moves.

To achieve stability, the government attempts to purchase foreign currency when the exchange rate becomes weaker and sell foreign currency when the pace of exchange gets stronger.

For this, the regime has to keep up large reserves of foreign currencies to maintain the exchange rate at the level fixed by it.

Under this scheme, each country keeps the value of its currency fixed in terms of some ‘External Standard’.

www.invstoc.com is one of the most comprehensive providers and pays its clients to access to only certified and trusted forex brokers globally with the highest in the world exceed 80% from given high baseline in comparison to all competing cashback providers.

You will first need to register with the cashback brokers. This is free, and no credit card or other financial information needs to be supplied. Once you have registered with INVSTOC you will be able to pick out and connect with forex brokers.

View this video to join the cashback program

This external standard can be gold, silver, other precious metal, another country’s currency or even some internationally agreed unit of a score.

This external standard can be gold, ash gray, other precious metal, another country’s currency or even some internationally agreed unit of account.

When a value of the domestic currency is linked to the value of another currency, it is recognized as ‘Pegging’.

When the value of a currency is defined in terms of any other currency or in terms of gold, it is recognized as ‘Parity value’ of currency.

Devaluation and Revaluation:

Devaluation refers to a reduction in the value of the domestic currency by the government. On the other hand, Revaluation refers to an increase in the value of the domestic currency by the regime.

Devaluation Vs. Depreciation:
Devaluation refers to a reduction in the price of the domestic currency in terms of all foreign currencies under the fixed exchange rate regime.
Depreciation refers to a fall in the market cost of the domestic currency in terms of foreign currency under a flexible exchange rate regime.

It takes place due to the Government and due to marketplace forces of demand and supply, It takes place under the fixed exchange rate scheme.

Why should forex trader join invstoc cash back program?
Invstoc provides over than 100 of only certified and trusted forex brokers globally, with the highest cash back ****** in the cosmos, far away from any manipulation or sarcasm which have been shown with unknown week forex cashback providers
Invstoc is the only economic networking website that allows instant withdrawal on a weekly basis
Invstoc provide forex traders with a completely free package of instruments and services which are necessary for any forex traders like
Forex currency calendar to alert all over the day
Economic news
Live trading signals by professional dealers
24/7 technical support and live chat.

Flexible Exchange Rate System:

I would not recommend for any new trader to start trading on margin. This is same risk level as for example using leverage to your account. If you know how to trade properly then this account can be beneficial to you, but if you are not certain how to trade, than it is better to use demo account

Margon levels are the most important factors for forex trading. I love this parameter cause it is directly related to money management. And to become successful we need to trade with money management.

Margon levels are the most important factors for forex trading. I love this parameter cause it is directly related to money management. And to become successful we need to trade with money management.

When we are making use of the money management in doing our trades then it also means that we are using less margins to remain safe and also in the process try to reduce our net losses from the markets.

Margin trading is a high-risk, high-reward trading strategy that allows you to buy more stocks that’s worth multiple times your original investment amount.. The best thing is, you can generate huge ROI if your trade is on the winning side. On the flip side, if your trade hits stop loss then you could lose more money than you normally would.

Currency
Rates
EUR / USD
1.09238
USD / JPY
146.674
GBP / USD
1.27320
USD / CHF
0.86531