Lesson 6 – Margin Trading

Margin trading in Forex allows traders to control large trades with a small investment by using borrowed funds, amplifying both potential profits and risks. This double-edged sword requires a solid understanding of key metrics like Balance, Used Margin, and Equity. Without proper risk management, traders may face margin calls or stop-outs, where positions are forcibly closed to prevent further losses. Leverage plays a crucial role in margin trading, offering greater control over trades, but also increasing the stakes. Successful margin trading hinges on careful planning, risk management, and a thorough understanding of how margin and leverage work together.