Margin trading in Forex is a financial security offered to a broker for a temporary credit that helps to make deals. Besides, a trader has a right not only to buy but also to sell monetary assets of his choice. Margin trading in the market is directly linked to the leverage providing small and medium traders with an opportunity to work with large lots.
The main law in a market is that trading must be profitable. As a rule, this profit is a difference between all expended resources and obtained assets. In the sphere of exchange markets it has a different meaning. The matter is that the process of selling and buying securities, currencies, precious metals and raw material is ongoing. That`s the reason why static terms used in the traditional commerce, convey some different meaning on exchanges. Here is used a special term for difference between some costs of goods or one position in different periods. It is a margin.
You should also remember about the risks. The more the borrowed amount, the more the losses will be in case of an unsuccessful deal. At the same time, a spread value, broker`s commission, must be also taken into account.
To minimize their risks, brokers usually set the maximum allowed level of the lowest margin for making transactions in Forex. Margin in the user`s interface is displayed in the section "Trading".