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Saturday, 9 April 2011

What is a "margin"?

A ‘margin" is the amount you put into the Forex contract you open (the investment which you risk). Online trading brokers must make sure that traders can pay if they lose money when they trade. Traders put money into an account that can be used to cover any losses they make. This amount is also called ‘minimum security".

With a margin, traders are able to invest in markets where the smallest trade you can make is already high. Margin trading can increase profit, but it can also increase loss.

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