When trading, you must maintain a certain level of funds in your account (required margin), also known as a bona fide deposit. Calculating and understanding your required margin requirements in advance allows you to practice good risk management and avoid unnecessary margin calls that cause a position to be closed due to insufficient margin in your account. Margin requirements on demo accounts are equivalent to those on corresponding real accounts.
Benefiting from the leverage effect in your investment with the right strategies creates high profit opportunities. High risk appetite, wrong strategies and trading with market reverse positions create the same risk; There are important rules that should not be ignored in all these transactions. If your investment opens a position with a higher lot than its collateral, you may face the risk of losing all or a large part of its capital.
In Forex transactions, the profit/loss ratio is calculated entirely according to the change in the unit price of the instrument, the profit/loss amount is calculated according to the size of the transaction volume, and a unit comes out accordingly.
XAU/USD: 1 ounce Price | 1-ounce Price $1,200 |
Lot | 1 |
Position size | 12.000$ |
Collateral | 1.200$ |
Leverage | 12.000/1.200= 10 |