What is Free Margin? | FXTM Learn Forex in 60 Seconds

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
ForexTime Ltd (www.forextime.com/eu) does not provide services to retail clients. Put simply, Free Margin in forex trading is the money you have available for trading in your account, but how do you calculate it? Watch the video for the full breakdown of this very important concept straight from the FX Guru and FXTM Head of Education himself, Andreas Thalassinos.
Learn more on: www.forextime....
Disclaimer: The content in this video comprises personal opinions and ideas and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.

[@behshadyassini1237]

very usefull. thanks

[@Tech-To-Logic]

if my currency pair like EURUSD then why you showing balance in USD. EURUSD means my base currency is in EUR.

[@arthur72i]

can you please explain why you calculate the loss in that method and how it fit the regular one: each PIP for LOT worth 10$ in EUR/USD, than for your example it would be: LOT * 10 * QoutedCurrency = 2*10*$= $20 95 * 20 = $1,900 other way to calculate it: 1) open position: 200,000 EUR * 1.20000 = $240,000 2) closing position: 200,000 EUR * 1.19050 = $239,100 the loss: $240,000 - $239,100 = $1,900 (also) but in your example you calculate the loss as $2,280, can you explain please where is my mistake?

[@fxtmglobal]

Hello arthur72i. Kindly contact our customer support at fxtm.co/start-chat-now to get full consultation, thank you.

[@benjaminlishika9378]

What is a spread & how is it calculated

[@fxtmglobal]

Hello! A spread is the difference between the ask price and the bid price. In other words, it is the cost of trading. For example, if the Euro to US dollar is trading with an ask price of 1.14010 and a bid price of 1.14000, then the spread will be the ask minus the bid price. In this case, 0.0001. The spread of 0.0001 is equal to one pip. Spreads are calculated in the same way for yen-based currencies like USDJPY. If the yen to the US dollar is trading with an ask price of 120.42 and a bid price of 120.40, then the spread will be 0.02 (120.42 - 120.40). This is equal to 2 pips.

[@benjaminlishika9378]

What is leverage

[@fxtmglobal]

Hello! Leverage is the ratio of a client's personal funds to the amount of funds required to open a position. Leverage is a feature offered by financial brokers that allows the client to trade with a volume that significantly exceeds the amount of personal funds they have at their disposal. These funds don't appear on the client's account, but are used directly in the trade when the client opens a position on the currency market in accordance with the amount of leverage set for the instrument or selected by the client. The amount of leverage only affects the margin level (the minimum amount of funds required to open a position). The higher the leverage, the less personal funds are required to open a position.

[@vicxthevictor5990]

can i ask a question how would you know a margin percentage?

[@fxtmglobal]

Hello Vicx the Victor! Please see the information here: www.forextime.com/about-us/fxtm-faq/calculations#faq5-details_c If it is not what you meant to ask, please contact our customer support at fxtm.co/start-chat-now specifying your question. Our specialists will be glad to assist you!

[@benjaminlishika9378]

What is a lot size

[@fxtmglobal]

Hello! An abstract name, adopted for use on the trading platform to designate the amount of a base currency or shares used in a deal. For example, with FXTM, one standard lot of EURUSD is equal to 100,000 units of the base currency. You can find precise information on lot sizes for all instruments in the Contract Specifications section: www.forextime.com/trading-instruments/contract-specifications

[@AmBx7965]

hello, what is the difference between trading directly with the amount and with this complicated method (trading on margin)

[@fxtmglobal]

Hello! Thanks to Marginal Trading clients can make trading operations using amounts which significantly exceed the amount on their trading account. You can find various educational materials, e.g. videos,ebooks, webinars, and seminars by visiting our website via the following link: www.forextime.com/education/learn-forex-trading. Shall you need any assistance, please feel free to contact us via live chat here: fxtm.co/start-chat-now. Our team will be happy to answer any questions you might have!