To begin, let’s look at three ways on how you would analyze and develop ideas to trade the market.
The “bid” is the price at which you can SELL the base currency.
The “ask” is the price at which you can BUY the base currency.
Trading on margin is a way for traders with limited capital to make significant profits (or losses).
Leverage is the increased “trading power” that is available when using a margin account.
The Stop Out Level is similar to the Margin Call Level, which was covered in the previous lesson, except that it’s much worse!
In forex trading, the Margin Call Level is when the Margin Level has reached a specific level or threshold.
The Margin Level is the percentage (%) value based on the amount of Equity versus Used Margin.
Margin can be classified as either “used” or “free”.
Equity is the current value of the account and fluctuates with every tick when looking at your trading platform on your screen. It is the sum of your account balance and all floating (unrealized) profits or losses associated with your open positions. As your current trades rise or fall in value, so does your Equity. How to […]