The FOREX allows spot currency positions to be leveraged at various amounts depending on the broker – up to 50:1 leverage is common. This means that a 2% margin deposit ($200) allows you to control $10,000 of currency in a 1 Mini lot position in the FOREX market. FOREX trading is conducted on “margin” which means that a cash deposit, usually much smaller than the underlying value of the currency contract, is required in order to trade. Margin available in your trading account is based on account equity, not account balance. The equity is the most accurate measure of the value of your account, as it takes into account unrealized gains and losses.
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