What is Balance?
Balance is the trader's deposited capital in forex like as https://www.instaforex.com/with any regulated broker. It can be interpreted income and expenditure in every business firm especially in forex market. When traders make profit or loss, balance will be changed meaning increase or decrease. You must have noticed that floating profit or loss in forex market does not fluctuate your balance. Let us explain shortly when a trader open a position meaning Buy or Sell in forex , a amount of dollar shows minus meaning broker's spread. Only after closing the opened trade/position in profit/loss balance can be increased or decreased.
Account Opening link https://www.instaforex.com/fast_open_live_account
What is Equity?
Equity is the account balance of a trader adding the floating profit or loss of his/her open position in forex https://www.instaforex.com/ market. Generally it can be told as the value of an asset explaining such as Equity = Asset - Liabilities . Here liabilities mean profit/loss of that asset. In forex market asset is the deposited money. So we can say in this way that Equity = Balance +(--) profit or loss.
What is Margin?
Margin is the amount of money needed in order to open a trade in forex. The ratio of trade volume to leverage is called margin. Account Opening link https://www.instaforex.com/bitcoin_trading
It is very essential for forex traders to know the margin calculation. Now let us discuss how to calculate margin. For example:
1 EUR = 1.2500 USD
10000 EUR X 1.2500 USD = 12500 USD/ Leverage.
Result is that Margin = 15500 / 1000
= 15.5 USD
15.5 USD will be used as margin on 1000 USD deposited balance . If you open more trades on more currencies then you will need more margin.
What is Free Margin?
Free Margin is available money to open a new trade in forex like as https://www.instaforex.com/. The money leaving the used margin money needed to open new position is called free margin. Now let us tell how to calculate free margin = Equity - Margin. For exampele:
Result,
Free Margin = 984.5 - 15.5
= 969 USD
Free Margin can be increased or decreased depending on the floating profit or loss.
What is Margin Level?
Margin Level is the ratio of equity to margin. In another words it can be said the percentage of value based on the money of opening trades between used margin and usable margin in forex market like as https://www.instaforex.com/.
Now let us discuss how to calculate Margin Level = Equity / Margin x 100
For example:
Account Balance 1000 USD
Margin used money 15.5 USD ( see margin)
Equity 984.5 USD ( 1000 usd - 15.5 usd)
Result,
It is very important for forex trading. Different brokers provide different limits for margin level.
New Account Opening link https://www.instaforex.com/
Account Opening link https://www.instaforex.com/fast_open_live_account
What is Equity?
Equity is the account balance of a trader adding the floating profit or loss of his/her open position in forex https://www.instaforex.com/ market. Generally it can be told as the value of an asset explaining such as Equity = Asset - Liabilities . Here liabilities mean profit/loss of that asset. In forex market asset is the deposited money. So we can say in this way that Equity = Balance +(--) profit or loss.
What is Margin?
Margin is the amount of money needed in order to open a trade in forex. The ratio of trade volume to leverage is called margin. Account Opening link https://www.instaforex.com/bitcoin_trading
It is very essential for forex traders to know the margin calculation. Now let us discuss how to calculate margin. For example:
- Account Balance = 1000USD
- Leverage = 1:1000
- Currency pair = EUR/USD
- Trade volume 1 lot = 10,000 EUR
1 EUR = 1.2500 USD
10000 EUR X 1.2500 USD = 12500 USD/ Leverage.
Result is that Margin = 15500 / 1000
= 15.5 USD
15.5 USD will be used as margin on 1000 USD deposited balance . If you open more trades on more currencies then you will need more margin.
What is Free Margin?
Free Margin is available money to open a new trade in forex like as https://www.instaforex.com/. The money leaving the used margin money needed to open new position is called free margin. Now let us tell how to calculate free margin = Equity - Margin. For exampele:
- Account Balance 1000 USD
- Margin used money 15.5 USD ( see margin)
- Equity 984.5 USD ( 1000 usd - 15.5 usd)
Free Margin = 984.5 - 15.5
= 969 USD
Free Margin can be increased or decreased depending on the floating profit or loss.
What is Margin Level?
Margin Level is the ratio of equity to margin. In another words it can be said the percentage of value based on the money of opening trades between used margin and usable margin in forex market like as https://www.instaforex.com/.
Now let us discuss how to calculate Margin Level = Equity / Margin x 100
For example:
Result,
Margin Level = 984.5 / 15.5 x 100
= 6351.6129%
= 6351.6129%
No comments:
Post a Comment