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Risks

Margin Risk

Margin or leverage risk can play a significant role in forex trading.  What exactly is margin trading?  Margin trading allows you to utilize leverage.  Usually, when you are placing a forex trade, it is necessary for you to put up only a portion of the total value of the position as good faith.  Your trade is considered leveraged if you are able to enhance your position size with borrowed capital.  The amount which is required to be placed upfront is deemed as the margin requirement.   Many forex brokers allow their forex trading clients to leverage up to 100:1. But just because they allow such high leverage, doesn’t necessarily mean that is it a good idea for you to use it.

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