Forex Margin Calculator, Do it yourself

Investment money for trading in the foreign exchange market means opening a margin account with a broker. The margin account is the amount of lending to the investor for a short period, this amount is based on the total money deposited in the brokerage account or trading. As a general rule, the margin accounts represent 1:100 ratio of real investment to finance normal. This article will discuss how an investor can use Forex Margin Calculator.

Margin Calculator: Select the total value of the deal

Also known theoretical value, a term used frequently in the funding environment, especially when talking about derivatives and currencies. Is the group's total leverage compared to the total value of the invested capital. In simpler words, it is not the value of customer investments but the perceived value is based on a margin account available. For example, if Mr. A invested $ 1,000 with rolling 1 and the agreement provides a margin of 100:1 then the total deal value of $ 100,000.

Margin Calculator: Select Peer margin of

Less the amount of money needed to cope with investor trading or brokerage house. They are known more margin requirements and regulated by the federal and state government. As a general rule, the primitive margin requirement is 50%, which has been developed by the Federal Reserve. The second requirement come to agree on the margin requirement, which is usually 25% to 30%. Remember failure to obtain these requirements will accelerate the margin call, and if it is not achieved, will be sold to the amount of quotas to achieve the requirements of the basic agreement.

Margin Calculator: Select Forex Margin

To determine this, you need to know the margin requirements and the value of the transaction. As a general rule, and like the previous example, less margin requirement is $ 100,000 and the value of the deal 1%, or 0.01. After that, the first strike in the second. In this example the output will be 100,000 * 0.01 = $ 1000

Margin Calculator: Calculate Leverage based on the margin

At first you need to know the theoretical value and margin trading. Refer to the previous example. Accounts and the result will be 100000/1000. Lack of counter and denominator and you'll get a 100/1. This means that the leverage-based margin will be 100 to 1

And examples of financial levers based on the margin:

400:1, or 0.25%

200:1 or 0.50%

100:1 or 1.00%

50:1 or 2.00%

Important points to remember

There are many aspects of the account you need to comply with the federal, state or local law. There are some aspects that can be agreed upon by both sides. The important thing to know is that forex margin is not designed to allow a speculative investment without adequate support from the capital to cover the expense of margin. It is designed to support the position of investment houses and brokers without changing the investment of funds fully.