Are you about to start trading in Forex? If so, you're certainly planning to use leverage to multiply your profits. But to use leverage, you'll have to know about Forex margin requirements.
Currency pairs will each have specific Forex margin requirements, and these are related to regulatory decisions, as well as expectations from the market.
Let’s take a look at what exactly Forex margin requirements are, and how they will affect you.
What are Forex margin requirements?
Forex margin requirements go hand in hand with leverage. When you use leverage, you are essentially trading on values that far exceed what you're depositing. The “margin” refers to the actual deposit.
Forex margin requirements, therefore determine what you have to deposit to trade. For example, a margin requirement of 1:50 implies that you have to deposit 2% of the value of the trade.