what is the margin requirement
The margin requirement is the amount of money you need to keep in your account to cover your current trade.
If the markets move against you and you start losing funds, your broker will inform you with a margin call. This means you no longer have sufficient funds available to cover your open trades . Upon receiving a margin call, you have the choice to deposit extra funds to cover your traders or cancel some of your trades . Failure to act on a margin call will result in your broker cancelling your open trades.
Who determines what the market requirements are?
These requirements are determined by brokers and vary based on factors like market conditions and the currency pair. A 2% margin requirement, for example, means the trader needs to deposit 2% of the total trade value, allowing them to control a larger position with a smaller initial investment.
The margin requirements are determined by your broker, and these may vary from broker to broker . The margin requirement can vary for different currency pairs and also depends on the current volumes of that currency being traded.
A margin requirement of 5% means you must maintain a minimum of 5% of value compared to your current trading value.
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